Table 1. Private investment in infrastructure, 1968-1994

Source: Kyubang Lee and Byung-rok Song, New Initiatives for Private Participation in Infrastructure, (KRIHS, 1998), p. 27.

The PPI programme was launched in 1994 with the adoption of the Promotion of Private Capital in Social Overhead Capital Investment Act. The Act aimed at facilitating PPI through the formulation of consistent government policies across all sectors and the institutionalization of clearly defined procedures to be followed for the involvement of the private sector in infrastructure development and its operation and management. Under the provisions of this Act, the central Government and various local governments in the country announced the launching of a total of 100 private infrastructure projects, 45 by the central Government and the remaining 55 by various local governments.

However, success in the first four years was far less than what was expected. Out of the 45 projects of the central Government, concessionaires were designated for only 10 projects and construction started on just 5 projects. Very little progress could be made with the rest of the projects of the central Government. However, the progress of the projects announced by local governments was much better, as can be seen from table 2. An important feature of all of these projects was that only domestic capital was invested.