Private investment social overhead capital

Social Overhead Capital (SOC) is a social infrastructure that is not directly used for production activities such as roads, ports, and railways but is essential for smooth economic activities.

SOC investments are not made by individuals or private companies because they are very large and their effects are wide to society. They are usually led by governments or public institutions.

However, private capital attraction system is being operated to supplement the shortage of government fund by utilizing private capital in the expansion of social overhead capital (SOC) and to introduce private efficiency to the public sector.


This system is mainly operated by a private enterprise for a certain period after the project expenses such as construction expenses for SOC facilities are put into operation, and the project costs and profits are recovered. In order to ensure profitability and smooth operation of the project, the government allows various support department projects, such as reduction of tax burden and financial financial support.

Since 1968, Korea has been promoting the participation of private capital in infra facilities by individual laws such as the Road Law and the Harbor Act. In 1994, the Law for the Promotion of Private Capital Infrastructure for Social Overhead Capital Facilities was enacted. In 1999, The private investment law for

The Ministry of Strategy and Finance, the Ministry of Strategy and Finance, establishes the annual plan for attracting private capital to the SOC project, and the 'Private Investment Committee', consisting of the ministers of the relevant ministries and civilian experts, Review the submitted private investment project plan.

On the other hand, there are BTO, BOT, BOO, BLT, ROT, and ROO in the way of SOC business promotion of private investment.


■ BTO (the Build - Transfer - Operate, construction and transfer after the operations )
social recognition of Facilities Management operatorship period of completion at the same time and the ownership of such facilities it belongs to the state or local government to the concession of infrastructure facilities

■ BOT (Build - Operate - Transfer, Construction ㆍAfter operating the transfer mode )
after the completion of infrastructure facilities and acknowledge the ownership of such facilities to the concession for a period of time attributable to that period expires facility ownership national or local governments

■ BOO (the Build - Own, - Operate, Construction ㆍ Owned operation method ) Upon
completion of social overhead capital facilities, the owner of the facility is recognized by the project developer.

■ BLT (Build - Lease - Transfer, Transfer of Construction and Lease Transfer )
project operator leases to the competent authority for a certain period, how the period is finished, pass ownership to authorities

■ ROT (Rehabilitate - Operate - Transfer, facility maintenance after the operatorship charging scheme )
recognizes the operating rights for the State or a concessionaire maintenance of existing facilities owned by municipalities period of the facility

■ ROO (Rehabilitate - Own -Operate, method of recognition of ownership after facility maintenance ) The
owner of the facility is recognized