"The Regime Has Changed, Indeed..." Ministry of Land-affiliated Agency Heads' 'Mass Resignation' Causes Unease Among Other Agency Heads

Won Hee-ryong, Minister of Land, Infrastructure and Transport

The heads of organizations under the Ministry of Land, Infrastructure and Transport (MOLIT) have been rapidly submitting their resignations. With numerous institutions already receiving failing grades in management evaluations and Minister Won Hee-ryong of MOLIT announcing plans for a strong public institution reform, there is speculation that a full-scale replacement of agency heads following the change of administration is underway.

According to MOLIT on the 6th, three agency heads have expressed their intention to resign internally and externally over the approximately five months since the launch of the Yoon Suk-yeol administration. Kim Hyun-joon, president of Korea Land and Housing Corporation (LH), the largest public enterprise under MOLIT, was the first to resign in August, followed by Kim Jin-sook, president of Korea Expressway Corporation, last month. On the 4th, Kwon Hyung-taek, president of the Urban Guarantee Corporation, abruptly announced his resignation with one year and six months remaining in his term.

The successive resignations of these heads have led to expectations of a large-scale overhaul of public enterprise presidents appointed during the previous administration. Traditionally, just as ministers and vice ministers of government departments are replaced en masse when administrations change, it has been customary for public institution heads appointed by the previous administration to step down and be replaced by new presidents.

In fact, after the inauguration of the Moon Jae-in administration in 2017, resignations of major public institution heads under MOLIT continued for about a year. Just one month after the administration change, in June, Kim Hak-song, president of Korea Expressway Corporation, submitted his resignation and stepped down, followed by Hong Soon-man, president of Korail, who resigned in July. In November, Kang Young-il, chairman of the Korea Rail Network Authority, and in April of the following year, Park Myung-sik, president of Korea Land and Geospatial Informatix Corporation (LX), announced their mid-term resignations. In May, Lee Seung-ho, president of SR, the operator of the Suseo High-Speed Railway (SRT), suddenly resigned.

As Minister Won Hee-ryong’s MOLIT is ordering strong reforms of affiliated organizations, pressure for resignations among the heads of dozens of affiliated institutions is expected to increase. Since his inauguration, Minister Won has emphasized public institution reform, strongly pressuring LH and Korail, with LH’s head being the first to be replaced. Following HUG, large institutions such as Korail and Incheon International Airport Corporation are mentioned as the next targets.

Korail (President Na Hee-seung) received the lowest grade, an 'E rating,' in the 2021 public institution management performance evaluation. Additionally, Minister Won recently issued a public warning regarding the management and operation of KTX, drawing attention. In July, Minister Won stated on Facebook, "I traveled across the country on KTX and checked various inconveniences such as restrooms, nursing rooms, and luggage lockers," adding, "Considering the relatively high fare of KTX, the services provided to passengers should be commensurate. Quick solutions are needed as fast as the KTX speed." By posting specific improvement points and photos, it was interpreted as a direct blow to Korail.

Kim Kyung-wook of Incheon International Airport Corporation was also identified as a 'key example of Moon Jae-in administration code personnel.' Kim Jung-jae, a member of the People Power Party, conducted a full survey of executives including heads, auditors, and standing directors of 37 MOLIT-affiliated institutions and stated, "69 people, accounting for 21% of the total, are presumed to be opposition code personnel." This included Kim Kyung-wook, president of Incheon International Airport Corporation. Kim is a former MOLIT vice minister and had run as an opposition party candidate in the general election (Chungju City) before joining the corporation. Minister Won’s absence of Kim’s name from the list of affiliated institution heads in the public-private delegation attending the International Civil Aviation Organization (ICAO) General Assembly held in Montreal, Canada, last month also sparked controversy. Incheon International Airport Corporation received a 'C' grade, the same as HUG, in the management evaluation. Korea Airports Corporation and SR also received C grades.

In this context, there is a view that the new government may be applying indirect resignation pressure on public institution heads appointed by the previous administration through audits by the Board of Audit and Inspection and investigations by the prosecution. Kim Soo-heung, a member of the Democratic Party of Korea, said, "Public institution heads are trembling under invisible resignation pressure." While supporting efforts to improve efficiency and correct lax management as part of public institution reform, he cautioned, "We must be wary of ministers abusing power, political interference from higher-ups, or external pressure causing mid-term resignations."

Meanwhile, there are currently 28 public institutions under MOLIT, employing about 82,000 people, performing tasks closely related to citizens’ lives such as housing welfare and transportation SOC.

Over the past five years, the number of institutions, employees, and debt scale of MOLIT-affiliated public institutions have all increased. As of the end of 2021, their sales volume was 52.2 trillion won, and net income was 2.6 trillion won. The debt scale reached 222.1 trillion won, with a debt ratio of 152.8%. On the 7th of last month, MOLIT became the first central government ministry under the new administration to announce the progress of 'Measures for Innovation of Affiliated Public Institutions.'