Public Institutions to Invest 63.4 Trillion Won This Year... Record 55% to Be Executed in First Half

[Asia Economy, Sejong = Reporter Lee Dongwoo] The government has set the annual investment scale for public institutions this year at 63 trillion won, with plans to execute more than 34.8 trillion won in the first half alone-a record high for this period. The government intends to swiftly execute about 55% of the total amount to ensure that the investment effects for stabilizing the national economy can be realized quickly.

According to the Ministry of Economy and Finance on January 27, the first "Public Institution Investment Execution Review Meeting" of the year was held at the Korea Fiscal Information Service, presided over by Second Vice Minister Sangdae Choi. The meeting was attended by fiscal management officials, public innovation review officials, and deputy heads of related public institutions such as Korea Land and Housing Corporation, Korea Electric Power Corporation, and the National Railroad Authority.

Vice Minister Sangdae Choi Presiding over the Treasury Bond Issuance Strategy Council
(Seoul=Yonhap News) Sangdae Choi, Vice Minister of the Ministry of Economy and Finance, is presiding over the "4th Treasury Bond Issuance Strategy Council" held at the Bankers' Hall in Jung-gu, Seoul on the 22nd. 2022.12.22 [Provided by the Ministry of Economy and Finance. Redistribution and DB prohibited]
Photo by Yonhap News
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This year, the government has set the investment scale for major public institutions at 63.4 trillion won. Of this, more than 34.8 trillion won (55.0%) is planned to be executed in the first half, marking the highest level ever for this period. This year's public institution investments are focused on projects with significant economic spillover effects, such as social overhead capital (SOC), energy, and housing welfare, in order to alleviate the public's economic burden. This approach is based on the judgment that the government needs to play an active role in a situation where the economy is expected to be sluggish in the first half and rebound in the second half.

By sector, investment in the SOC field will be the largest at 33.6 trillion won, focusing on building residential infrastructure through the creation of new towns and housing supply, as well as expanding transportation networks. Korea Land and Housing Corporation (LH) will execute 8.8 trillion won for land compensation for the third phase new towns such as Goyang Changneung and Namyangju Wangsuk, and 3.8 trillion won for land development in areas such as Pyeongtaek Godeok, Paju Unjeong, and the Multifunctional Administrative City. The National Railroad Authority will push forward with railroad construction projects such as the second phase of the Honam High-Speed Railway and the Samsung-Dongtan Metropolitan Express Railway, as well as facility improvement projects (5.5 trillion won). Korea Expressway Corporation plans to proceed with projects such as the Anseong-Guri section of the Seoul-Sejong Expressway (4.7 trillion won).

A total of 17.4 trillion won will be invested to establish a stable energy supply base and to support nuclear power plant construction. Korea Electric Power Corporation will carry out projects such as transmission and substation facilities (2.5 trillion won), distribution facilities (3 trillion won), and information and communication technology (ICT) infrastructure (700 billion won). Korea Hydro & Nuclear Power will invest 4.2 trillion won in nuclear power plant construction and facility reinforcement. Five power generation subsidiaries will also execute 3.8 trillion won for facility investments.

Investment will also be strengthened in the housing welfare sector to stabilize the residential lives of the public. LH plans to invest 5 trillion won in housing welfare projects such as purchasing multi-family homes, while Korea Asset Management Corporation (KAMCO) will execute 1.1 trillion won for household and business support projects. In addition, the government plans to continue investments for public welfare, such as expanding agricultural infrastructure (1.4 trillion won).

Vice Minister Choi stated, "We will spare no effort in supporting improvements to institutional execution conditions to ensure that investment plans are carried out without setbacks," adding, "In particular, if necessary, we will establish a task force to address execution difficulties, with the participation of relevant ministries, to resolve on-site issues." He also called on each institution to establish a dedicated management system for investment execution to ensure smooth implementation.

Meanwhile, the Public Institution Investment Execution Review Meeting was first held in August 2019 and has since been monitoring investment performance to ensure that public institution investments play a key role in revitalizing private investment and responding to economic conditions.