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Cabinet waives feasibility studies for 24.1 tln won worth of projects

The Cabinet on Tuesday approved the waiving of preliminary feasibility studies for 23 projects worth 24.1 trillion won ($21.5 billion) in the latest move to promote balanced regional development.

The decision means that the projects will be on the fast track for implementation across the country except Seoul.

The projects call for, among other things, fostering regional strategic industries through research and development; building roads, railroads and a tram system; and setting up a hospital to treat people injured in industrial accidents.

Hong Nam-ki, the minister of economy and finance (Yonhap)
Hong Nam-ki, the minister of economy and finance (Yonhap)

"The government's strategic investments are urgently needed to secure a foothold for regional growth," Hong Nam-ki, the minister of economy and finance, said in a news conference at the ministry's building in Sejong, an administrative hub located about 130 kilometers southeast of Seoul.

Many young South Koreans in rural provinces have flocked to Seoul in search of high-paying jobs over the past decades, a move that has led to the hollowing out of rural communities and poor infrastructure in provincial areas.

The latest action calls for the provision of 200 billion won for development of technologies for future vehicles in North Jeolla Province on the country's southwest.

The projects also include the construction of an international airport worth 800 billion won in Saemangeum, a reclaimed area on the country's southwest coast, by relocating a small airport near the port city of Gunsan to Saemangeum.

South Korea has been seeking to attract foreign investment and to transform Saemangeum -- more than four times the size of Manhattan -- into an eco-friendly waterfront city with high-end industrial, tourism and agricultural facilities, as well as science and research institutes.

President Moon Jae-in said last week that the government is adopting a policy of skipping feasibility studies for urgent regional infrastructure projects in a move to foster balanced development in a country where about one-fifth of the 51 million population lives in Seoul.

Kwon Dae-jung, a professor of real estate studies at Myongji University, said the government's decision could help create jobs in the construction sector and provincial areas.

The Construction Association of Korea, which speaks for builders in South Korea, also hailed the exemption of preliminary feasibility studies, citing a planned hike of investments in construction and infrastructure.

Some critics say the government should be careful in exempting projects from preliminary feasibility studies as they lead to taxpayers' footing the bill for unviable ventures.

The government is required to conduct a preliminary study on any state-led project whose business costs exceed 50 billion won and for which it has to provide more than 30 billion won worth of financial support.

Preliminary feasibility studies, introduced in 1999, are meant to avoid wasting the budget by assessing how much benefit can be achieved for money being spent.

Still, the government can waive the preliminary feasibility study for a project endorsed by the Cabinet for balanced regional development.

Park Sang-in, a professor of the Graduate School of Public Administration at Seoul National University, said South Korea introduced the preliminary feasibility study to avoid a possible misuse and abuse of fiscal spending by the government ahead of elections, but the government is actually "running counter to the purpose" of the preliminary feasibility study. (Yonhap)