On Feb. 4, the U.S. Army 19th Expeditionary Sustainment Command in Korea disclosed the arrival of essential equipment for the 2nd Stryker Brigade of the U.S. Army’s 2nd Infantry Division, which is scheduled for the next rotational deployment to Korea, at Pier 8 of Busan Port in Nam-gu, Busan.
It has been revealed that the maintenance, repair, and overhaul (MRO) business for foreign naval vessels is facing setbacks in South Korea due to a lack of domestic ship repair infrastructure, including a shortage of dedicated berths in Busan Port. Pointed criticisms indicate that the government and related agencies must prioritize securing berths for the entry and maintenance of foreign naval vessels and expedite the construction of the Busan Port ship repair complex.
According to the ‘Report on the Request for Canadian Naval Vessel Entry and Port Facility Berth Use’ submitted to the National Assembly by the Busan Port Authority (BPA) on Sept. 18, the Ministry of Foreign Affairs requested domestic entry and the use of a port facility (berth) for a 5,200-ton Canadian Navy frigate through the Embassy of Canada to Korea.
The Canadian vessel H, which is in the 5,200-ton class and reaches 147 meters in length, planned to berth at the Gamman Eastern Public Pier in Busan Port for 13 days from Oct. 2 to 14 to undergo repairs, disembark crew members, and conduct sightseeing. However, according to the corresponding report document by the BPA, notification was given that the use of the berth would be difficult because the Gamman Eastern Pier is a ‘dedicated pier for cargo handling (loading and unloading)’ rather than for ‘repair purposes.’
The report document specifically pointed out that all 4 Canadian warships that entered the port this year utilized the Republic of Korea Fleet Command’s Baegunpo Pier. Furthermore, it noted that the scope of repairs was not specified beyond exterior painting and cooler maintenance, and that a shortage of security personnel could arise during the disembarkation process of approximately 200 crew members.
It was also revealed that consultations by domestic companies to secure MRO berths have continuously fallen through.
In July, discussions were held with one of the top three domestic shipbuilding companies regarding the use of berths and land for the MRO business at the Uam Pier in Busan Port, but it was reported that no progress was made on the grounds that it was a request from a private enterprise rather than an official project request from the Ministry of National Defense.
In August, the use of a berth at the Gamcheon Port Western Breakwater in Busan was also discussed, but it is reported that the berth could not be secured due to difficulties in coordinating repair schedules with the primary users, such as the Korea Ship Repair Industry Cooperative.
Ultimately, the BPA established its position to advise that the 5,200-ton Canadian vessel H consult with the Republic of Korea Fleet Command for use of Pier 8 of the North Port (dedicated pier for the Eighth United States Army) instead of the Gamman Eastern Pier, similar to previous Canadian warship repairs.
The naval authorities reportedly conveyed their position to Representative Song Ok-joo’s office that it is difficult to guarantee a berth at the Republic of Korea Fleet Command’s Baegunpo Pier because the level of repair and maintenance for the vessel in question has not been identified and there were no prior consultations with the Canadian Navy, but they would provide support within the feasible scope.
In effect, the MRO business targeting foreign naval vessels is obstructed not only by security and military consultations but also by difficulties in securing berths due to a lack of infrastructure, the separation of civilian and military port functions, and issues with schedule coordination among project entities.
Recently, the demand for domestic entry and maintenance of foreign naval vessels has been growing, including the ‘MASGA’ project, a shipbuilding cooperation initiative between South Korea and the United States. However, this case demonstrates that the MRO business for foreign naval vessels could experience difficulties in actual project execution due to a lack of support systems for securing repair berths, security, and customs clearance.
In relation to this, the industry is expressing concerns that despite the outstanding technological prowess of the domestic shipbuilding industry, it will be difficult to preempt the overseas MRO market because of the lack of port infrastructure to carry out vessel repairs and maintenance.
Representative Song Ok-joo emphasized, “The government and related agencies must secure dedicated or jointly utilized berths for the entry and maintenance of foreign naval vessels, and standardize procedures for security screening, access control, and consultations with military authorities,” adding, “The development of the Busan Port New Port ship repair complex, which is a national task, must be accelerated, and the maintenance of related laws and regulations must be expedited.”
Meanwhile, the Ministry of Oceans and Fisheries is promoting the ‘Busan Port New Port Ship Repair Complex Development Project’ with the goal of commencing construction in 2028 and opening in 2033.
The Ministry plans to develop a ship repair complex targeting large vessels of 30,000 tons or more in the southern area of Busan New Port in Baegokpo, Gadeokdo, through private investment under the “non-managing authority port development” method stipulated by the Harbor Act.
A project feasibility study is currently underway following the receipt of proposals in February of this year. The Busan New Port Ship Repair Complex project carries a total project cost of approximately 1.5 trillion won (approximately $1.08 billion), comprising approximately 1 trillion won for the ship repair complex itself and approximately 500 billion won for the breakwater and access road. The project will develop three docks including two dry docks and one floating dock, along with three fitting-out quay berths, 390,000 square meters of land area, a breakwater, and an access road.
The global ship repair market is projected to grow from $38.8 billion in 2025 to $58.5 billion by 2034. China currently accounts for 40% of the global ship MRO market. The annual budget for U.S. military vessel MRO projects amounts to $17 billion. Due to the shortage of domestic ship repair infrastructure, 93% of South Korean-flagged large vessels of 30,000 tons or more undergo MRO in China and Singapore, raising concerns over the leakage of proprietary technology.
