By Kim Hyun-cheol
Staff Reporter
South Korea has seen its water utility fees jumping 3.5 times over the last 14 years, as a result of failed management of the country's water-management firm, the National Assembly Budget Office (NABO) said Sunday.
Water rates were 63.9 won per ton in 1995, but surged to 288.6 won last year. During the period, expenses for excessive investment have been improperly passed on by the state-run Korea Water Resources Corporation (K Water), NABO said.
In an analysis of K Water's internal report for 2006, the office concluded its excessive facility-expansion projects accounted for 26 percent of that year's average per-ton water bill of 270 won.
The company that year supplied a total of 3 billion tons of tap water to provincial governments, which earned K Water 731.1 billion won. Korean citizens would have saved 209.5 billion won in aggregate without those projects, according to NABO.
Excesses in water service-related development projects is mainly attributable to the current water management system, which has been dualized since 1995.
Both K Water and provincial authorities have different waterworks system. Currently the Ministry of Land, Transport and Maritime Affairs is in charge of the K Water-managed facilities, while the Ministry of Environment controls locally operated ones. That circumstance, consequently, has led to managerial inefficiency.
Despite growth in overall capacity, the operation rate of water supply facilities dropped across the nation as a result of overlapping development. They could process 31,260 tons per day in 2007, up 42 percent from 12 years before, but their availability in the same period fell 69.5 percent to 53 percent of that total.
K Water has made easy profits with the buck-passing. The firm, over the last 10 years, has posted an averaged 158.8 billion won in yearly net income.
NABO said the biggest problem lies in the structure of the state-run firm ― the business failure of which doesn't damage its profitability.
``Expenses from K Water's excessive projects needs to be removed from water rates,'' NABO business appraiser Kim Sang-woo said. ``In the long term, it will also streamline the company's operation as well.''