Inchon airport's debt snowballs

Inchon International Airport, which is scheduled to begin operation next March, will start off its first year with 80% of its first-year estimated income going toward debt repayment, making it difficult for normalized operation, according to the Board of Audit and Inspection.

The BAI revealed that it had conducted a study Mar. 2 to Apr. 7 on the construction of Inchon International Airport and submitted its findings to the Ministry of Construction and Transportation, as well as the Inchon International Airport construction authorities, requesting a measure to offset this liability.

According to the report, the first year of income of the airport is estimated at 535 billion won for 2001. However, the interest payment for the debt was estimated at 441 billion won, or about 82.4% of the income.

The committee explained that the debt snowballed as a result of frequent changes to the original blueprint and also as the government in 1995 decided to foot 40% of the total cost with the remaining 60% being the responsibility of the Inchon International Airport's construction company.

As a result, the opening of the airport will be met with difficulties in operations because it will find it necessary to divert its earnings to debt repayment.

Inchon International was first estimated to require 3.5 trillion won in early 1992, but the estimate was revised five times. The original blueprint for the construction saw frequent changes, about 97 instances, and by November 1999, the cost estimate had jumped to 7.99 trillion won.