Ministry of the Interior and Safety Requires 'Feasibility Review' When Establishing Local Public Enterprises
Feasibility Review by Minister-Designated Institution
The Ministry of the Interior and Safety announced on the 17th that it will reform investment projects that have been recklessly promoted in local areas. The ministry plans to complete the revision of the 'Enforcement Decree of the Local Public Enterprises Act' and the 'Enforcement Decree of the Act on the Operation of Local Government Investment and Contribution Institutions' within this year, and implement them in the first half of next year.
Accordingly, from now on, local governments or local public enterprises must undergo a review of the project's economic feasibility and policy validity by a specialized institution designated by the Minister of the Interior and Safety in order to establish an investment corporation and promote projects worth 100 billion KRW or more. Until now, feasibility reviews for investment projects were conducted through local research institutes established by metropolitan local governments for basic local governments, while local public enterprises conducted feasibility reviews without separate specialized institutions.
Through this revision of the enforcement decree, it is expected that specialized institutions with expertise will strictly analyze the feasibility of projects before local governments or local public enterprises start investment projects, thereby preventing financial waste factors in advance.
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Choi Byung-kwan, Director of the Local Finance and Economy Office, stated, “This revision of the enforcement decree has established safeguards for investment projects that have been indiscriminately promoted by local governments and local public enterprises,” and added, “We will continue to discover institutional improvement measures so that individual local public institutions can provide high-quality public services to residents through innovation.”
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