Suspension of Coastal Passenger Ship Operation Management Fee Burden for Up to 90 Days Starting April

[Asia Economy Reporter Joo Sang-don] The Ministry of Oceans and Fisheries and the Korea Maritime Transportation Safety Authority announced on the 5th that they will defer the payment of coastal passenger ship operation management fees for up to 90 days starting in April to support coastal passenger ship operators facing difficulties due to the spread of the novel coronavirus infection (COVID-19).

According to the Ministry of Oceans and Fisheries, the number of coastal passenger ship users from February 1 to March 25, about two months, decreased by approximately 40% compared to the same period last year, reaching about 1 million passengers due to the spread of COVID-19. Correspondingly, the revenue of passenger ship companies also dropped by about half.

In response, the Ministry of Oceans and Fisheries has implemented support measures such as early execution of subsidy projects, reduction of rental fees for coastal passenger terminals, provision of emergency management stabilization funds, and reduction of computerized ticketing fees to support the coastal passenger ship industry. In addition, they plan to temporarily defer the payment of coastal passenger ship operation management fees to ease the industry's burden.

The operation management fee is a shared cost borne by operators because small-scale coastal passenger operators find it difficult to establish independent operation management systems. The Korea Maritime Transportation Safety Authority appoints operation managers to build a joint operation management system, and the operators jointly bear part of the required costs. Since 2019, 2.9% of the passenger fare received by coastal passenger operators has been collected as this fee. The total operation management fees paid from March to May last year amounted to 1.7 billion KRW.

Kim Jun-seok, Director of the Shipping and Logistics Bureau at the Ministry of Oceans and Fisheries, said, "We understand that coastal passenger ship operators are facing significant management difficulties due to the sharp decline in passengers caused by COVID-19," and added, "We will continue to devise measures to support coastal passenger ship operators."