Development and Operation of Table

Ⅰ General Situation

Ⅱ Facility & Equipment

Ⅲ Occupants

Ⅳ Working Process

Ⅴ Functions & Effects of ICD

Ⅵ Consideration of PPP

- 1 - Korea

Bhutan

China Japan

Myanmar

Laos

Thailand

Cambodia

Map of Asia - 2 -

Uiwang ICD

Busan Port

Map of Korea - 3 - Railroad Station

Highway

Highway

General view of Uiwang Inland Container Depot - 4 - Repair Shop Gas Station

Station Building

Terminal 1

CFS

CY

Terminal 2 Railroad

Expressway Auto Maint. Shop

CFS

Map of Uiwang Inland Container Depot - 5 - Purpose of Establishment

Strengthening national competitive power by minimizing logistics cost through improvement of nation’s ocean-going container logistics system

Found of Corporation

ㅇ ‘91.5 : Finalization of Construction Plan of ICD (SOC Investment Committee – Government body) ㅇ ‘92.4 : Establishment of SPC (Uiwang ICD Co.,Ltd.)

Invite of Stockholders

ㅇ Public Sector : 25% (Korea Railroad/Government owned corporation)

ㅇ Private Sector : 75% (15 Companies) - 14 container transportation companies - 1 container repair company

- 6 - Secure of Land-site

ㅇ Ownership of Land : Public Sector (Korea Railroad) ㅇ Period of Lease : 1993.7~2023.7 (30 years) * Pay rental charge every year

Construction

ㅇ Period : ‘94.12 ~ ‘96.10 ㅇ Total Cost : US$30Million ㅇ Financing - Public sector : Base facilities (road, railroad, electricity, water, sewage) - Private sector : Building, CY(Container Yard), CFS, Equipments * Stockholders paid construction cost by cash ratio of their shares. ㅇ Container Handling Capacity : 1.3 Million TEU/year

Benefit of Investment

ㅇ Obtain the right of monopolistic using of CY by paying charge * Private stockholders(15) operate their CY independently ㅇ Obtain the right of using of office room by free of charge ㅇ Type of Investment : BUILD OPERATE(30years) TRANSFER

- 7 - Item Description

Total of Lands (Area) 753,000 ㎡ Container Yard 417,000 ㎡ C.F.S (Bonded Warehouse) 10,700 ㎡ (3 bldgs) Operation Building 140,000 ㎡ (8 bldgs) Automobile Maint. Shop 1,720 ㎡ ( 1 bldgs) Container Maint. Shop 1,220 ㎡ (1 bldgs) Reefer Plug 96 Unit Railway 6,262 m (11 lines) Gas Station 480㎘

- 8 - Transfer Crane (3EA) Reach Stacker (43EA)

(RTGC type)

Tractor (650EA) Trailer (1800EA)

- 9 - Operation Structure

Uiwang ICD Co., Ltd Shareholder Company

Management of Facility Transportation of Container Loading/Unloading of Railroad Operation of CY(Container Yard) Container & CFS (Container Freight Station) Public Container Yard Operation Container Repair Shop Bonded Area Operation Automobile Maintenance Shop Sales of Petroleum

Government Body

Name Major Function

Custom House Customs clearance procedure Foodstuff Inspection Inspection of imported Foodstuff Plant Quarantine Quarantine of imported agri-product Railroad Station Railroad Transport of Container

- 10 - Others

Customs Clearance Brokers

Transportation Brokers (35)

Convenient Facilities : cafeteria, lodging house

Working person : 1,000 (Uiwang ICD Co., Staff : 37)

- 11 - Import

Railroad Overland

Unloading Report Approval

Brokers>

Railroad Overland GATE Export

GATE

- 12 - SEOUL INCHON UIWANG ICD

BUSAN • RAILROAD OVERLAND

- 13 - DFT : Domestic Freight Terminal IFT : Combined ICD and DFT

Incheon Port

Busan Port Gwangyang Port Major Sea Ports and Dry Ports - 14 - - 2 - Inland Container Terminal

Perform CY(Container-Yard), CFS (Container Freight Station) function like Ports

Record (TEU)

Item 2011 2012 2013 2014 2015

Railroad 502,366 527,732 495,464 444,583 448,716

Overland 493,368 481,044 583,659 563,181 536,032

Total 995,734 1,008,776 1,079,123 1,007,764 984,748

- 16 -

Railroad Transportation

Contract with transportation company with round-trip and daily basis

Running time : 8 ~ 30 Trains per day Uiwang ICD Busan, Gwangyang Ports

Record (TEU)

Item 2011 2012 2013 2014 2015

Arrival 230,685 243,066 227,721 193,393 202,143

Dispatch 271,681 284,666 272,743 251,190 246,573

Total 502,366 527,732 495,464 444,583 448,716

- 18 -

Customs Clearance

One-stop Service

Custom House, Food Inspection Office, Plant Quarantine Office station in ICD

Check the customs procedure in real time on Integral Logistics Network

Record Information Network (TEU)

Item 2012 2013 2014 2015 Korail Customs Government Import 46,862 48,946 36,775 35,933

Commodity Uiwang ICD

Transportation Machinery Electric Footwear Ot h e r s Company Shipper 25% 23% 10% 42% Shipping Line

- 20 -

Inland Transportation

Deliver Empty Container shortest distance

Combine Transport with Railroad & Overland

Flow of Transport Railroad Transport(Korail) Overland Transport

[Ports] [Uiwang ICD] [Shipper] Save Delivery Cost

- 22 - Relief of Traffic Congestion by large volume of Railroad Transport

Utilization as Clearance Depot for Capital Region’s Container (Curtailment of cost and time)

Reform the function of CY/CFS at inland as Sea-ports (Relief of accumulated cargo at ports)

Operate sophisticated computer processing system (Supplying latest logistics information to the related parties at real time)

- 23 - Background of PPP Settlement

ㅇ SOC Investment Committee publish construction plan of ICD (‘91.5) - Railroad Authority (RA) : wants to construct & operate alone by the RA’s budget - Private sector(transportation company) : oppose RA’s plan and persuade Committee to make PPP with RA [factors of success] * If RA’s union strike and the ICD shut-down, it becomes the disaster * RA does not have experience of management of ICD * Government invite Private sector’s money and save the budgets

Conclusion of PPP Negotiation

ㅇ Railroad Authority : 25% (invest to commercial company up to 25% only) ㅇ Private Sector : 75% - transportation companies (14) : 73% (secure the area of CY by shares) - container repair company (1) : 2%

- 24 - Benefits

ㅇ Government’s financial support - direct support of 25% of total construction cost - improvement and widen the road of outside ICD

ㅇ Easy to go through permission procedures of central and local government - evaluation of transport effects and environmental effects according to development - construction in the development of restriction zone (Green Belt Zone)

ㅇ Use of public land sites (property) at competitive cost

ㅇ Sustainable operation of ICD during 30 years - according to contract with public

ㅇ Get a loan(policy fund) from financial institute at a very low interest (other ICDs)

- 25 - Challenges

ㅇ Tendency toward private side, when a conflict of interests between Public and Private - Public sector : the right of nomination of CEO, - Private sector : dominant position in a board of directors and a general shareholder’s meeting.

ㅇ Differing view on operation and management of ICD company - Public sector : to increase freights of railroad transportation and dividend of share - Private sector : instead of dividend, to keep a low rates(charges) of operational cost. * Our company transacts business with Private sector 67% of total revenues.

- 26 -