South Korea's rival parties are pushing legislation to turn MASGA, a Korea-U.S. shipbuilding cooperation project, into a broader upgrade of the country's shipbuilding ecosystem. The aim is to strengthen the industrial base beyond overseas investment by major shipbuilders, by easing financing burdens for smaller shipyards and localizing production of key equipment and materials.
Rep. Jung Jin-wook of the Democratic Party of Korea and Rep. Park Sung-min of the People Power Party, both members of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee, jointly introduced the special act on revitalizing the shipbuilding ecosystem and strengthening its competitiveness on the 14th, according to political sources. The bill's core is a comprehensive support framework covering smaller shipyards and equipment makers through an industry-wide master plan and a dedicated fund.
Under the bill, the minister of trade and industry would draw up a master plan for revitalizing the shipbuilding ecosystem and strengthening its competitiveness every five years, and an advanced shipbuilding strategy council would be established to review and coordinate related policies. The government would designate advanced future shipbuilding industry clusters and support tenant companies' facility investment and research infrastructure costs, while allowing reductions in fees for the use of state and public property as well as in levies.
The bill also includes financial support for smaller shipyards. Policy lenders including the Korea Development Bank, the Export-Import Bank of Korea and the Korea Trade Insurance Corp. would be required to give priority to refund guarantees (RGs) for smaller shipyards, with preferential treatment allowed for guarantee limits, rates and screening criteria. The bill also allows for measures that would set aside a certain share of public vessel orders for smaller shipyards.
The bill provides the legal basis for an advanced future shipbuilding fund dedicated to the industry. The fund would be financed by government contributions, contributions from policy lenders and voluntary contributions from companies in the sector, and would be used for refund guarantees for domestic shipyards, the building of smart yards, supply chain stabilization and the construction of vessels designated as essential to the country.
The bill also covers government support for Korea-U.S. shipbuilding cooperation projects and the legal basis for establishing and operating a Korea-U.S. shipbuilding cooperation center. The plan is to foster shipbuilding as a national strategic industry while extending cooperation with the United States into growth opportunities for smaller domestic shipyards and equipment makers.
"Through this special act, we will strengthen financial support such as refund guarantees and technology development support for smaller shipyards and equipment companies, and make sure those results lead to local job creation and stronger regional economies," Jung said. "We will build a sustainable shipbuilding ecosystem in which major shipbuilders, smaller shipyards, equipment companies and local communities grow together."