"Government Pre-Feasibility Study Results to Be Reviewed by National Assembly to Enhance Reliability and Transparency"

[Sejong=Asia Economy Reporter Kim Hyunjung] A proposal has been raised for the National Assembly to review and verify the results of the government's preliminary feasibility study.

On the 25th, Yang Kyungsuk, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, announced that she would propose an amendment to the National Assembly Act to specify the National Assembly's review of the preliminary feasibility study results conducted by the government and to allow the Assembly to request corrections such as re-investigation from the government if necessary.

The preliminary feasibility study system was introduced in 1999 during the Kim Dae-jung administration with the goal of providing objective and neutral information on the feasibility of large-scale projects. Over the past 20 years, it has contributed to supporting rational decision-making and improving fiscal management efficiency through the evaluation and implementation of 849 projects totaling 386 trillion won in fiscal projects.

In the early years from 1999 to 2002, evaluations were based mainly on economic efficiency through cost-benefit analysis (B/C, benefit-cost analysis). From 2003, policy evaluations were added, including regional balanced development items.

Since 2006, the regional balanced development item has been clearly defined separately. The scope of target projects has also expanded from construction projects at the system's introduction to include informatization projects in 2004 and R&D projects in 2005.

However, there have been criticisms that the preliminary feasibility study system still focuses mainly on economic efficiency and fails to reflect various social values. In response, the Moon Jae-in administration established the 'Preliminary Feasibility Study System Reform Plan' in 2019 to create a balanced evaluation system.

Currently, in the 21st National Assembly, various amendment bills have been submitted, focusing on raising the preliminary feasibility study threshold for SOC projects aimed at regional balanced development (raising the total project cost from 50 billion won to 100 billion won), adding exemption reasons for the preliminary feasibility study, and changing the entity responsible for conducting the study.

Representative Yang's position is that securing fairness and rationality in the results of the government's preliminary feasibility study based on the National Assembly's budget review authority should take precedence over changing the study criteria.

In 2014, the National Assembly amended the 'National Finance Act' to disclose materials related to preliminary feasibility study results. However, there is currently no proper review procedure to guarantee the accuracy or fairness of the investigation process and results.

Yang stated, "Although various institutional improvements have been made to the evaluation criteria and methods over the 20 years since the introduction of the preliminary feasibility study, controversies regarding the objectivity and neutrality of the system for large-scale national projects still arise. To enhance the reliability and transparency of the preliminary feasibility study system, which significantly impacts national balanced development, it is necessary for the National Assembly to fully exercise its budget review authority granted by the people."

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