Relaxation of Reassessment Criteria for New Investments in Local Public Enterprises... Simplification of Exemption Procedures

Revision of 'Feasibility Review Guidelines'
Integrated Execution of Site Preparation and Construction
Expansion of Specialized Review Agencies

The criteria and targets for re-evaluating the feasibility of new investments by local public enterprises will be relaxed. With the simplification of the exemption procedures for feasibility, it is expected that project execution will be expedited.

On the 11th, the Ministry of the Interior and Safety announced that from the 12th, the "Guidelines for Feasibility Review of New Investment Projects by Local Public Enterprises" will be revised and implemented, and the "Specialized Institutions for Feasibility Review of New Investment Projects by Local Public Enterprises" will also be expanded. This guideline is a follow-up measure to the "Plan to Revitalize Investment in Local Public Enterprises" announced by the Ministry last month on the 7th.

First, the criteria for re-evaluation have been relaxed so that projects with a cost increase of 30% or more or delays of 4 years or more must undergo a feasibility re-evaluation. Previously, projects had to be re-evaluated if costs increased by 20% or more or if the project was delayed by 3 years or more after the initial feasibility review. With the relaxed criteria, projects excluded from re-evaluation can shorten their execution period by more than 6 months.

The exemption procedure for feasibility has also been simplified. The Ministry of the Interior and Safety has streamlined the exemption request form in line with the system’s purpose of supporting rapid project execution and established grounds for collectively confirming exemptions for eligible projects. Previously, the exemption request form required quantified values such as profitability improvement effects and regional economic impact, and each project had to go through an exemption confirmation process.

Furthermore, the Ministry has allowed that if the period from land acquisition to building completion does not exceed 5 years, land development and construction projects can be considered as a single project for feasibility review. Previously, even if land development and construction projects were consecutive, separate feasibility reviews were required.

Additionally, the Ministry revised the notice on "Specialized Institutions for Feasibility Review of New Investment Projects by Local Public Enterprises," adding the Korea Local Finance Guarantee Fund to the existing two specialized institutions, the Local Public Enterprise Evaluation Institute and the Korea Institute of Local Administration. The Korea Local Finance Guarantee Fund can now conduct feasibility investigations for local governments and feasibility reviews for local public enterprises in an integrated manner. As a result, it is expected that budgets and personnel for the feasibility review process can be significantly reduced.

Choi Byung-kwan, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, stated, "The role of the public sector is crucial for the recovery of the local economy, which is struggling due to prolonged high interest rates and inflation. Through the follow-up measures of the local public enterprise investment revitalization plan, we will actively support the prompt investment by local public enterprises to help restore the livelihood economy."

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