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Constitutional Study on the PFI for Infrastructure - Focused on the purpose and it's limits of the PFI -
Public Land Law Review
Abbr :
KPLLR
2012, 58(), pp.221-244
Publisher : Korean Public Land Law Association
Research Area : Law
2012, 58(), pp.221-244
Publisher : Korean Public Land Law Association
Research Area : Law
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Infrastructure is public goods performing important functions for economic growth and people's lives. So, traditionally it has been installed and operated by the state. However, as the inefficiency of the public sector and financial limitations are pointed out, private finance initiative for infrastructure project has been increasing steadily. As Infrastructure is essential precondition for social integration and a nation as a unity, so material conditions to realize the fundamental rights guaranteed by the constitution. In addition, infrastructure is a very important means of economic growth, as well as balanced regional development and social justice in which the state seeks to realize the goal of social state principle. The constitutional responsibility of the state should be highly emphasized in these aspects of the infrastructure. However, such a state should be responsible for infrastructure, it does not deny that the state introduce a system of private investment to overcome the financial limitations to satisfy the demand for infrastructure. The goal of the private finance initiative for infrastructure is to make national economic development in an efficient expand and operate of the infrastructure, and ultimately aims to contribute to enhanced benefits of the people and public interest. However, it is not clear that the efficiency of the infrastructure projects which are driven through the private investment could be higher than that be run and funded directly by the state. People through private investment institutions have more opportunity to take advantage of the infrastructure because it is possible to expect the infrastructure could be expanded with private capital. But when the constitutional responsibility of the state to the infrastructure is assumed, we have to admit these benefits can be recognized only limited. In addition, the nature of private investment projects is debt of the people to pay through elevated fees and taxes, so it's profits are very limited. Also, the cost of infrastructure projects will be charged to the individual user, it is becoming more difficult to achieve social justice. The regulatory agencies are easy to captured by private investment group. Considering these side effects can be occurred, the public interest can be realized by private investment projects is uncertain. Eventually, it is necessary to approach the private finance initiative assuming that the infrastructure should be installed and operated by the state on the burden of the whole community, in this sense, it is need to be more specifically defined the requirements and procedures, the scope and limitations of private investment projects, and private investment in infrastructure is exceptionally allowed only when the urgency and necessity are clearly recognized.
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