Relaxation of evaluation standards should not result in wasteful spending
The government has recently announced a revision to its feasibility studies protocols for national projects. In short, the revised system calls for making it easier to start public works, especially in provincial areas, by relaxing standards in evaluating the economic viability of projects.
Under the changed criteria, the weighting given to economic viability will decrease, while that of balanced development will increase in assessing the feasibility of infrastructure projects in rural areas. The revised rule also added new items, such as job creation, environmental effects and welfare improvement, to the assessment criteria.
These changes are aimed at increasing the number of national projects ― conducted in areas other than Seoul and its vicinity ― getting the regulatory go-ahead. The preliminary feasibility study was introduced in 1999 to prevent budget waste in spending on non-essential public projects.
However, local administrations have continuously voiced complaints about the feasibility studies. Infrastructure projects outside the capital have relatively poorer economic viability compared to those in Seoul, making it more difficult to pass screening. They have a point. Putting too much stress on economic feasibility could result in unbalanced regional development, making rich areas richer and poor ones poorer.
We have considerable concerns about the relaxed criteria, however. If local governments push ahead with public works that are expected to incur losses, they will end up with swelling debt. As always, it will be taxpayers left holding the bag. Critics of the Moon Jae-in administration suspect, with reason, the eased rules may be targeting provincial voters ahead of parliamentary polls next year.
All this shows why the government should come up with supplementary precautions to keep the relaxed rule from causing budgetary waste. It is right in this regard for the Ministry of Economy and Finance to decide to operate an evaluation committee composed of experts from inside and outside of government. The proposed panel should not be reduced to a rubber stamp. It should have sufficient independence and authority to play its role faithfully as the watchdog of the taxpayers' money.
The government has recently announced a revision to its feasibility studies protocols for national projects. In short, the revised system calls for making it easier to start public works, especially in provincial areas, by relaxing standards in evaluating the economic viability of projects.
Under the changed criteria, the weighting given to economic viability will decrease, while that of balanced development will increase in assessing the feasibility of infrastructure projects in rural areas. The revised rule also added new items, such as job creation, environmental effects and welfare improvement, to the assessment criteria.
These changes are aimed at increasing the number of national projects ― conducted in areas other than Seoul and its vicinity ― getting the regulatory go-ahead. The preliminary feasibility study was introduced in 1999 to prevent budget waste in spending on non-essential public projects.
However, local administrations have continuously voiced complaints about the feasibility studies. Infrastructure projects outside the capital have relatively poorer economic viability compared to those in Seoul, making it more difficult to pass screening. They have a point. Putting too much stress on economic feasibility could result in unbalanced regional development, making rich areas richer and poor ones poorer.
We have considerable concerns about the relaxed criteria, however. If local governments push ahead with public works that are expected to incur losses, they will end up with swelling debt. As always, it will be taxpayers left holding the bag. Critics of the Moon Jae-in administration suspect, with reason, the eased rules may be targeting provincial voters ahead of parliamentary polls next year.
All this shows why the government should come up with supplementary precautions to keep the relaxed rule from causing budgetary waste. It is right in this regard for the Ministry of Economy and Finance to decide to operate an evaluation committee composed of experts from inside and outside of government. The proposed panel should not be reduced to a rubber stamp. It should have sufficient independence and authority to play its role faithfully as the watchdog of the taxpayers' money.
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