Gov't to revise feasibility study for rural, city projects

By Park Hyong-ki

The government will change the way its economic organizations measure and forecast demand for future infrastructure projects in cities and rural areas beginning next month.

In a policy meeting Wednesday aimed at reviving the economy, Finance and Economy Minister Hong Nam-ki said such feasibility studies will be conducted via a dual-track system for metropolitan and rural areas.

This means the organizations will no longer apply a single standard of measurements and rules to evaluate their economic feasibility.

Projects proposed by rural and regional offices will be measured more by their potential in boosting their communities and people's livelihoods, rather than just whether or not the infrastructure projects can reap enough returns on investment.

On the other hand, officials will apply more quantitative measures on projects proposed by metropolitan cities such as Daegu and Busan.

It will shorten the standard period of time organizations such as the Korea Development Institute (KDI) take to conduct feasibility studies to less than a year, down from the current 19 months.

This is part of efforts to speed up rural and provincial development, while at the same time further internationalizing cities.

“By giving more weight to evaluating rural projects' potential in boosting regional development, the government seeks to pursue those projects on time,” Hong said.

Reflecting the rapidly changing environment and social needs, all projects, henceforth, will be measured on four key things ― whether they can create quality jobs, improve the environment, strengthen the safety system and boost welfare.

To this end, the government will have more institutes than just the state-run KDI be involved in carrying out feasibility studies.

It will include organizations such as the Korea Institute of Public Finance to do such studies.

This comes after meeting and listening to regional and city offices' thoughts on the matter for a year.

The finance ministry then decided to revise the 20-year-old study method so that it would better reflect people's needs.

“The revised method is expected to increase the chances of rural projects getting the green light,” Lee Seung-chul, director of the ministry's fiscal management, told reporters ahead of the meeting.

Finance Minister Hong also said his ministry will draft a supplementary budget to fund combating fine dust, creating jobs especially for those in their 30s and 40s and reviving exports.

The ministry will submit the plan to the National Assembly this month.

“We need to rapidly deal with problems concerning fine dust and unemployment amid the downside risk to the economy on falling exports,” Hong said.