Incheon Airport stake sale drawing protests

By Lee Hyo-sik

The Lee Myung-bak administration’s plan to sell a 49-percent stake in Incheon International Airport, backed by the governing Grand National Party (GNP), is drawing protests from opposition parties, civic groups and the airport operator’s union.

As part of a government-wide effort initiated in July 2008 to “advance” hundreds of state-run enterprises, the Lee administration tried to dispose of its stake in the airport. But the drive came to a virtual halt due to negative public sentiment.

But the privatization scheme has recently picked up fresh steam, with the GNP moving to pass a revised bill on the Incheon International Airport Corp., initiated by Rep. Park Sang-eun of the GNP in March 2010.

Under the revision, up to 49-percent of the government’s holdings will be sold to private investors, with foreign ones not allowed to secure more than a combined 30 percent.

The GNP tried to pass the bill in the National Assembly extraordinary session in June, but failed to do so due to strong protests from opposition parties.

Government and ruling party officials argue that it is necessary to raise funds to make Korea’s main gateway to the world more competitive and efficient, adding the airport should learn advanced operation and management know-how from the world’s top-class airports to become a true global aviation hub.

They stress Incheon airport still has a lot of room for improvement even though it was named the world’s best airport in service quality.

True motive questioned

However, the union of Incheon International Airport Corp., opposition parties and civic groups are raising doubts about the true motive behind the government scheme.

They argue the Lee administration may seek to provide favors to well-connected private businesses, particularly foreign investors, by selling its stake in the airport at a relatively low price.

Lee Ki-ung, coordinator at the Citizens’ Coalition for Economic Justice, said the government should not sell its stake to private investors, stressing that Incheon is one of the world’s top airports, operating efficiently and generating huge profits.

“The airport has and will continue to perform well even under 100-percent state ownership. There is no reason whatsoever for the government to privatize it. We think there are political motives behind it. The Lee administration may seek to provide favors to private companies, particularly foreign investors,” he said.

Lee said if the airport is privatized, it will become more expensive for the public to use as its monopolistic position will result in higher fees and other costs.

Additionally, Incheon City Council, controlled by the main opposition Democratic Party, issued a statement Wednesday, opposing the attempt to sell the state shares.

“The stake sale goes against public opinion and has no merit. It will not strengthen the competitiveness of the airport as the government claims, and could compromise national security. We will mobilize all possible resources to stop the government and the GNP from selling the airport,” the council said.

It asked the Democratic Party to block the revision of the law governing the operation and management of the airport.

The airport workers union also opposes the planned sale.

“Over the years, we have been working hard to stop the privatization plan. Like railways, roads and other crucial national infrastructures, airports should be owned and operated by the government, not by private businesses, because the sector is monopolistic,” a union official said.