Infrastructure Investment to Be Advanced
By Yoon Ja-young
Staff Reporter
Amid sluggish construction following the bursting of the real estate bubble, the government said it would invest 5.3 trillion won in building infrastructure earlier than previously scheduled.
The Ministry of Strategy and Finance said major state enterprises including the Korea National Housing Corporation, the Korea Land Corporation, and Korea Expressway Corporation, will execute around 5 trillion won worth of projects earlier than originally scheduled. The advance would increase total investment in infrastructure by state enterprises this year to 52 trillion won.
The measure aims at boosting the construction investment, which has been notably sluggish recently.
It also includes executing around 600 billion won worth of public project investments and 300 billion won worth of public construction orders, originally allocated for the second half this year, in the first half.
The government will introduce a new investment system in which private constructors start building infrastructure on loans. Construction of infrastructure such as roads and railways often was delayed due to the lack of the funding from the government. Even in such cases, constructors would be borrowing money from banks to continue the project as originally planned.
The government said it is a win-win strategy for both the government and the constructors, as the delay of a project means higher expense for the government later. The ministry said it plans to execute some 300 billion won of projects in this way this year, and some 1 trillion won in projects next year.
According to the ministry, construction investment fell 0.7 percent in the first quarter compared with the previous year. It expected construction investment to continue the sluggish move in the second quarter as well. It hoped the measure would help the economy, boosting the economic growth rate by around 0.1 percentage points.