Government to Uncover 13 Trillion Won in Private Investment Projects... 9 Trillion Won to Start Construction This Year

2023 Private Investment Project Activation Strategy
Accelerating Private Sector Construction Start and Strengthening Investment Execution Management

The government will seek to discover new private investment projects worth 13 trillion won this year. It also announced plans to accelerate the commencement of ongoing private projects and strengthen investment execution management.

On the 6th, the Ministry of Economy and Finance held an emergency economic ministers' meeting combined with an export investment countermeasures meeting and unveiled the "2023 Private Investment Project Activation Promotion Strategy" containing these measures. This strategy is a follow-up to the "Private Investment Project Activation Plan" announced in June last year, emerging amid some delays in tasks such as discovering new types of projects. Given the need for proactive response to the downside risks in the economy this year, the focus was placed on strengthening the role of private investment.

According to the plan, the government's discovery of private investment projects will be pursued in three directions: new types of target facilities, converting fiscal projects to private investment, and the New Growth 4.0 strategy. Facilities not previously targeted for private investment, such as administrative complex towns or environmental complex facilities, will also be promoted as private projects, and if they are essential for private investment review, active inducement for conversion through eligibility assessment will be conducted. In particular, projects currently undergoing preliminary feasibility studies will be actively considered for conversion to private investment. Projects included in the New Growth 4.0 strategy will also be examined to see if any can be converted to private investment.

The scale of private investment projects to be promoted this year is set at 8.9 trillion won. To ensure swift progress, the private investment eligibility assessment procedures will be expedited. For projects delayed in investigation, eligibility determination will be completed within the first half of the year by resolving issues. If necessary, the Private Investment Project Deliberation Committee will also be convened as needed.

Private Investment Execution 4.35 Trillion Won...Focused Encouragement for Underperforming Projects

The investment funds required for project discovery and rapid promotion amount to 4.35 trillion won this year, with 2 trillion won allocated to roads and 1.6 trillion won to railroads. The execution scale has been on the rise from 3.2 trillion won in 2021 and 3.28 trillion won in 2022. The government plans to execute more than 50.8% within the first half of the year to respond to the economic trend of a strong first half and weak second half. Execution performance will be regularly checked through a private investment execution consultative body, and if underperformance occurs, encouragement will be directed toward the respective projects. Priority management will focus on projects with significant economic stimulus effects and large execution scales.

Measures and improvement tasks to activate private investment projects will be applied at each promotion stage. Private investment projects proceed in the order of project discovery → proposal → eligibility assessment → third-party announcement → agreement and financial commitment → construction → operation and management. The government will accept criticism that the criteria for what projects can be considered private investment at the discovery stage are not specific and will create a checklist. Additionally, a concrete project model of the "improvement and operation type" method, which carries out the renovation of aging facilities as private investment projects, will be proposed.

At the project proposal stage, measures to reduce the burden on project implementers, such as lowering the level of private proposal document preparation, will be prepared. Currently, private proposal projects require significant upfront costs in the planning stage compared to fiscal projects, placing a heavy burden on private operators. Along with this, new regulatory provisions will be established to enable active participation of small and medium-sized enterprises not only in local government projects but also in national projects.

The issue of slowed eligibility assessments due to an increase in the number of projects under investigation will be resolved by shortening the period. The investigation period for environmental projects will be reduced from 270 days to 210 days, and for projects exempt from preliminary feasibility studies and simplified eligibility assessments, it will be shortened to 60 days.

Furthermore, the credit guarantee fee rate, which was a burden on project operators, will have its lower limit reduced by 0.05 percentage points, and reductions in facility usage fees will also be encouraged.

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