Fallout From Rejection of Financial Special Provisions for Local Public Enterprises... Gwangju Urban Corporation Says It "Contradicts the Purpose of Decentralization"

Key Financial Special Provisions for Equity Investment, Capital Investment, and Bond Issuance Largely Excluded
"Management Autonomy of Local Public Enterprises Restricted"...Concerns Over Impact on Projects

The Gwangju Urban Corporation has protested the Ministry of the Interior and Safety’s refusal to accept a large portion of key financial special provisions for local public enterprises, saying the move runs counter to the national policy of decentralization. The corporation argued that if the central government’s control-oriented regulations remain in place, it will inevitably disrupt the implementation of regional development projects.

Gwangju Urban Corporation.

According to the Gwangju Urban Corporation on the 12th, its recent analysis of the Ministry of the Interior and Safety’s proposed “revised acceptance plan for special provisions for local public enterprises” found that major financial special provisions under the Local Public Enterprises Act Article 54 (Investment in Other Corporations), Article 65-3 (Feasibility Review of New Investments), and Article 68 (Issuance of Bonds and Foreign Loans) have been classified under a “non-acceptance stance.”

The corporation stated that, in the government’s public materials, the items presented as acceptable are limited to a few administrative matters such as the terms of office for executives, whereas special provisions related to substantive management authority, including equity investment, capital investment, and bond issuance, were not accepted on the grounds that “nationwide common standards are necessary.”

In particular, it pointed out that the feasibility review procedure for new investments is required to go through specialized institutions designated by central government ministries, which has repeatedly prevented regional priority projects from being promoted in a timely manner. It also cited as a problem the fact that, under Article 68 of the Local Public Enterprises Act, the debt ratio ceiling for Korea Land and Housing Corporation (LH) is 500%, while that for local development corporations is limited to 400%, and in actual operations is managed at around the 300% level.

Kim Seungnam, President of the Gwangju Urban Corporation, said, “The President and the Prime Minister are emphasizing the era of local autonomy and calling for deregulation, but the working-level ministries are maintaining regulations that tie the hands and feet of local public enterprises,” adding, “Large-scale regional projects are losing momentum as they are blocked by uniform standards and gatekeeping-style administration.”

The corporation believes that, if this revised acceptance plan is finalized as is, it may become difficult to make timely investments needed to boost regional vitality. It therefore plans to ask the government to accept special provisions that would strengthen the management independence of local public enterprises, including delegating core fiscal authority to local ordinances. It also announced that it will continue efforts to secure autonomy under the Local Public Enterprises Act by conveying its views to relevant bodies, including the Office for Government Policy Coordination under the Prime Minister.

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