KOTI - Korea Transport institute

In September 2009, MGDs was adopted during a summit meeting at the UN Headquarter in NY. Developing countries were starting to recognize that ODA funds could not be enough for expanding SOC even though expansion of SOC is a very urgent task. To overcome this limitation, PPP utilizing private capitals for ODA projects was received attention.
Korea ODA budgets have increased and expanded since Korea became a member of DAC. However, the volume of ODA funds is still relatively low by comparison with major donor countries. ODA budgets are far from enough for SOCs needed in developing countries to economic development and poverty eradication.
Utilizing private capitals is one of alternatives to supplement the shortage of ODA funds. However, there still exist difficulties that a private sector carries forward transportation PPP projects independently. Since the purpose of a private sector is the pursuit of profits, a private sector will not participate in the transportation projects of specific regions that are hard for generating profits.
For mutual supplementation of limitations such as shortage of ODA funds for the transportation SOCs in developing countries and uncertainties and risks of transportation projects in developing countries to a private sector, the connection between ODA and PPP could be an alternative in carrying forward transportation projects. The connection between ODA and PPP can create mutual synergy effects and contribute to resolve problems of donor organizations and a private sector.
Hence, this study is aiming to improve effectiveness and efficiency of transportation ODA projects and suggest strategies for promoting private sector investment to developing countries by connecting ODA with PPP. For this purpose, we try to draw policy implications of major donor organizations and countries including World Bank(WB) and Asia Development Bank(ADB) regarding the connection between ODA and PPP and seek application methods suitable for Korea situation. In addition, we suggest the connection methods between ODA transportation projects and private sector investment projects and the improvement direction of a system for efficiently implementing these connection methods