The 3rd Fiscal Project Evaluation Committee Meeting of 2021 Held on the 28th
[Asia Economy Reporter Jang Sehee] The government has decided to increase the indicators used to assess regional underdevelopment in preliminary feasibility studies.
On the 28th, the Ministry of Economy and Finance held the "3rd Fiscal Project Evaluation Committee of 2021" and announced on the 30th that it had approved the revision of the standard guidelines for each section of the preliminary feasibility study (PFS). The PFS guidelines specify detailed matters related to evaluation, such as cost-benefit estimation and analysis by evaluation items, and are operated through the Korea Development Institute (KDI), which conducts the PFS.
According to the resolution, currently, eight indicators related to population, economy, and infrastructure are used to assess regional underdevelopment, but going forward, 36 balanced development indicators announced by the National Balanced Development Committee will be utilized.
These include indicators related to housing, transportation, industry, and jobs, so the government expects that evaluations of regional balanced development will better reflect local realities.
Additionally, to improve the accuracy of cost-benefit analysis when analyzing economic feasibility, the government has specified the standards for estimating construction costs of general railway systems and mechanical equipment costs for road tunnels according to equipment type and tunnel grade.
Along with this, the standard applied when calculating the value of travel time benefits for cultural and tourism facilities has been changed from "non-work travel time" to "leisure travel time." The Ministry of Economy and Finance explained that applying leisure travel time, which refers to travel time for leisure, dining out, and visiting relatives, has the effect of increasing the estimated benefits.
The government decided to maintain the social discount rate, which converts future costs and benefits into present value during economic feasibility analysis, at 4.5%.
Meanwhile, the revised guidelines will be applied from the investigation stage of the first PFS target projects selected on the 30th of last month.
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