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Public sector decision framework for airport development : The case of Incheon International Airport in South Korea

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Frame of Image a main case to demonstrate how to bring private sectors into airport development given country-specific circumstances. The Korean government is looking into operational enhancement, global competitiveness as Asian hub airport and financial feasibility of expansion phases, which it believes private sectors deliver the most. Yet IIA has given public tasks such as providing stable public services, contributing fiscal benefits to the national budget and creating business and employment opportunities. The key challenge for Korean policymakers is to arrange profit maximization and public provision of the airport service compatible with each other. The study discusses two alternatives that can align private and public objective functions - public private partnership (PPP) and partial privatization through share floatation. The study also notes that the decision can only be successful when the government is able to keep an appropriate level of control over the airport with transparent governance and draw future partners’ commitments. The study finds that policymakers ought to choose the option that is considered to maximize the benefit from the public airport asset but, in often cases, there is no clear consensus on what “the benefit” is. Hence it recommends policymakers to set a clear strategy for its airport business, and reach to a comprehensive agreement among key stakeholders on their decision, which will completely change the value of the asset to future investors and current s


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Title Public sector decision framework for airport development
Similar Titles
Sub Title

The case of Incheon International Airport in South Korea

Material Type Reports
Author(English)

In, Soh Young; Casemiro, Luiza A. S.; Kim, Julie

Publisher

Stanford University

Date 2015-09
Pages 29
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Territorial Development < Transport/Logistics
Government and Law < General