[Shifting Public Institutions] Rapid Progress in Power Generation and Airport Mergers... Major Hurdles Ahead Due to Union and Local Opposition

President Lee: "There are so many, I can't even count them"

Ministry of Data and Statistics launches full-scale integration of affiliated agencies

Incheon establishes dedicated task force to respond to public institution consolidation

The consolidation of public institutions is accelerating. Since President Lee Jaemyung's remark last August that there are "so many that I can't even count them," a number of agencies in the statistics, energy, and airport sectors have been considered for restructuring. In particular, Incheon International Airport Corporation, Korea Airports Corporation, and the five Korea Electric Power Corporation (KEPCO) power generation subsidiaries are leading candidates. However, strong opposition from labor unions and local communities is expected to make the integration process challenging.

Incheon International Airport Terminal 1.

According to government sources on the 21st, the Ministry of Economy and Finance is set to submit a draft plan for public institution consolidation to the Presidential Office as early as this month, following consultations with relevant ministries. The final version will be announced at a strategy meeting on restructuring public institutions, which will be chaired by the President.

President Lee pointed out the excessive number of public institutions during a national fiscal savings meeting last August and ordered the formation of a task force for consolidation. In the Cabinet meeting in January this year, he referred to the case of integrating agencies under the Korea Forest Service, which has accelerated the momentum for further mergers.

For example, several public organizations under the Korea Forest Service—such as the Korea Forest Fire Prevention Technology Association, the Korea Erosion Control Technology Association, and the Forest Pest Monitoring Center of the Korea Forestry Promotion Institute—have already been officially merged to form the Korea Forest Disaster Safety Technology Corporation. The Ministry of Data and Statistics has established a new team dedicated to the practical work of merging its affiliated organizations, and has begun the process of integrating the Korea Statistical Information Service with the Korea Data Industry Agency. President Lee previously pointed out overlapping functions at the Korea Statistical Information Service, stating, "To avoid controversy over a big versus small government, the administration created disguised organizations under the appearance of affiliated agencies."

The biggest point of interest is whether the five KEPCO power generation subsidiaries (Korea South-East Power, Korea Midland Power, Korea Western Power, Korea Southern Power, and Korea East-West Power) will be consolidated. The main debate centers on whether to merge all subsidiaries into a single entity or maintain two or more to preserve competition. According to the Ministry of Climate, Energy, and Environment, the results of a study commissioned to Samil PwC on integrating power generation public corporations will be released early next month. Based on these findings, the ministry will further detail the integration plan and announce interim results.

The integration of Incheon International Airport Corporation, Korea Airports Corporation, and Gaduk New Airport Construction Corporation is also under serious consideration. Currently, Incheon International Airport Corporation operates international routes, while Korea Airports Corporation manages 14 domestic airports, including Gimpo and Jeju. There have been recurring criticisms that the separation between the airport corporations leads to inefficiencies in flight routes and services.

However, the consolidation plan is expected to face complications due to intertwined interests of local communities and labor unions. The labor union at Incheon International Airport Corporation immediately objected to the proposed merger. Heo Inmoo, Secretary General of the Incheon International Airport Corporation labor union, stated, "Out of the approximately 6 trillion won in economic value generated from transit passengers and transshipment cargo, up to 4 trillion won could disappear." He also pointed out that the profitable Incheon airport may have to absorb losses from regional airports. Incheon Metropolitan City has even established a dedicated task force to respond to public institution relocations and consolidations. The city aims to hear firsthand accounts of the problems associated with relocation and integration and to develop a joint response strategy that reflects local concerns.

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