PM urges re-examination of energy initiative projects

By Kim Hyo-jin

Lee Wan-koo

Prime Minister Lee Wan-koo Thursday called for a re-examination of foreign energy development projects as he expressed concern about the growing debt of state-run companies.

“A sense of crisis permeates among the people regarding the skyrocketing debt of state-run firms. There is a need to review the current situation,” Lee said during a meeting to monitor institutional reforms of public bodies.

“We should be frank about the situation now. Otherwise, we could be in huge trouble later.”

In the first public reform meeting presided by the prime minister, 17 heads of debt-ridden state-run companies joined Finance Minister Choi Kyung-hwan, Trade, Industry and Energy Minister Yoon Sang-jick and Land and Transport Minister Yoo Il-ho to discuss the issue.

Lee urged the participants to take special measures to address their debt levels, asking them to seek advice from outside consultative bodies.

His comments were notable as it indicates that the government is ready to examine the feasibility and profitability of ongoing “energy diplomacy” projects in overseas countries.

The government may decide to drastically decrease the number of overseas energy projects which have come under criticism for failing to yield profits, as well as becoming mired in corruption allegations.

The previous Lee Myung-bak administration ambitiously sought to secure energy assets across the globe in a bid to enhance the nation's energy self-reliance. But the various projects have come under criticism for incurring massive losses with few results.

The government is also widening its investigation into allegations of corruption related to the state-financed overseas projects.

The Board of Audit and Inspection (BAI) on Wednesday began its inspection into the Korea National Oil Corp., Korea Gas Corp., and the Korea Resources Corp.

The state agency said it aims to identify potential irregularities in its energy deals.

The focus of the inspection will be examining any misuse of state funds under the current financing system in which energy developers are often given exemption from paying back government loans.

The inspection will be carried out by 34 officials and will continue until June 16.

Prime Minister Lee previously hinted at a review of energy projects when he declared an “all-out war” on corruption during his first address to the nation.

“Malpractice and insolvent investment regarding ‘energy diplomacy’ are posing a major burden to the national finances,” he said.