Public Institution Preliminary Feasibility Study Period Shortened to 4-5 Months... New Impact Assessment for Overseas Projects by SMEs Introduced

[Asia Economy Reporter Kwangho Lee] The period for preliminary feasibility studies (PFS) of public institutions, which used to take an average of over 10 months, will be shortened to 4 to 5 months.

On the 23rd, the government held the 3rd Public Institution Investment Execution Inspection Meeting at the Government Seoul Office, chaired by Deputy Minister Koo Yoon-cheol of the Ministry of Economy and Finance, and announced plans to reform the public institution PFS system.

According to the reform plan, the current investigation period of about 10.5 months will be shortened. Overseas projects will complete investigations within 4 months, and domestic projects within 5 months.

To this end, only projects that have undergone internal feasibility verification procedures within the institution will be allowed to apply for PFS, and a simplified PFS system that allows a 2-month reduction if there is a precedent case will be actively utilized.

However, the investigation period for overseas resource development and exploration projects, as well as domestic industrial complex development projects, is set within 7 months.

Evaluation criteria will also be restructured. For domestic projects, evaluation items and weights for the metropolitan and non-metropolitan areas will be adjusted to ensure that essential projects can be promoted in a timely manner.

For overseas projects, an evaluation of the ripple effects on small and medium-sized enterprises will be newly established, and the profitability evaluation will reflect the uniqueness of individual projects.

Additionally, management of total project costs for large-scale projects of public institutions will be strengthened. The Ministry of Economy and Finance will establish guidelines for total project cost management.

Other measures include the introduction of scenario and alternative analysis techniques, relaxation of PFS reapplication requirements, expansion of external policy experts’ participation in comprehensive evaluations, and awarding additional points for the materials, parts, and equipment industry.

During the meeting, the investment performance of public institutions was also reviewed.

Public institutions executed investments worth 13.8 trillion won in the first quarter of this year, exceeding the plan of 13.6 trillion won.

Deputy Minister Koo urged, "Please make efforts to execute the annual investment plan of 60.5 trillion won and the first half target of 29.4 trillion won."

Last year, public institutions executed 54.1 trillion won out of the 55 trillion won target, achieving an execution rate of 98.1%.

Deputy Minister Koo emphasized, "This year, amid the economic contraction caused by the novel coronavirus disease (COVID-19), active investment and early execution by public institutions as final demanders are essential."

He also requested, "Please actively participate in expanding consumption expenditure through advance payments and prepayments by public institutions as final demanders this year."

This content was produced with the assistance of AI translation services.