By Kim Tae-gyu
Staff Reporter

The Seoul administration will step up efforts to bail out the slumping shipping industry, which has failed to recover from the unprecedented global financial distress this year.

The Ministry of Land, Transport and Marine Affairs said that its 4-trillion won fund, set up early this year in order to help languishing shippers here, would buy vessels even under construction.

In addition, the ministry is ready to pay more and quickly for vessels of beleaguered shippers down the road.

First announced in April, the fund bought a total of 17 vessels from two domestic shippers at 60 percent of their market prices ― 20 percent came from banks and 40 percent came from public funds.

The remaining 40 percent of the prices were put on the risks of sellers, which instead have the right to repurchase the vessels at the same value ― 60 percent of market price ― later when things get back on track.

From now on, public funds will finance up to 60 percent of the fair prices. If banks take charge of 20 percent as they did, this means that shippers will be able to garner 80 percent of the prices of vessels on hand.

``Even though the economy has shown some signs of stabilizing in other areas, the shipping industry is expected to have hard time for the time being due to oversupply,'' a ministry official said.

``In this climate, many shippers struggle to stay afloat because of reduced income. While seeking to go ahead with corporate restructuring with destined firms, we also need to help ones, which face temporary problems despite good fundamentals,'' he said.

The country's shipping business has practically exploded in the past several years as the number of marine transporters jumped from a mere 73 in 2004 to 177 as of the end of last year.

Also, the number of vessels almost doubled over the same period on the back of strong exports, from 471 to 819.

Yet, the unexpected global economic turmoil, which caused plummeting outbound shipments, jolted the once flourishing industry. For example, exports of Asia's fourth-largest economy plunged up to 33.8 percent in January from a year ago. The exports regained somewhat afterwards but the amount is still less than that of last year

The strengthened rescue plan aimed at saving the shipping industry was reported to the emergency economic meeting, chaired by President Lee Myung-bak.

voc200@koreatimes.co.kr