One in Three Government-Funded Projects Marked for Reduction or Abolishment... Land, Infrastructure and Transport Tops the List

First Announcement of Integrated Fiscal Project Performance Evaluation by the Ministry of Planning
901 Out of 2,487 Projects Rated as Underperforming
"7.7 Trillion Won to Be Restructured Through 15% Budget Reductions"

This year, for the first time, both the government and the private sector jointly evaluated the outcomes of projects funded by the national budget, and more than one in three received a failing grade. The government plans to restructure spending by reducing next year's budget for projects deemed to have underperformed, through cuts or abolishment, with the goal of adjusting expenditures by nearly 8 trillion won.

Yonhap News Agency

With the end of 'self-evaluation,' 36.2% of projects to be cut, discontinued, or consolidated... Ministry of Land, Infrastructure and Transport tops the list

The Fiscal Performance Committee of the Ministry of Planning and Budget finalized and announced the results of this integrated evaluation of fiscal projects. Until last year, each ministry conducted their own 'self-evaluation' of various projects. However, the objectivity and effectiveness of these lenient self-assessments were called into question. From this year, relevant ministries and private sector experts jointly conducted a comprehensive evaluation of projects across all ministries.

Woo Sukjin, a professor at Myongji University and head of the fiscal project evaluation team, stated, “In a phase of fiscal expansion, restructuring existing expenditures is essential to gain public approval, so we aimed for an objective and independent evaluation based on this consensus. We maintained a rigorous evaluation approach to reflect the values of taxpayers without preconceptions, from the public’s perspective.”

As a result, out of 2,487 government fiscal expenditure projects evaluated, 901 projects (36.2%) were designated for spending restructuring, receiving ratings for budget cuts, discontinuation, or consolidation. Projects identified as needing improvement—but not necessarily reduction—totaled 1,497 (60.2%). Only 89 projects (3.6%) were rated as “normal operation,” recognized for effectiveness and policy importance and requiring continued support. An official from the Ministry of Planning explained, “The 36.2% restructuring rate is the highest ever, more than twice the recent five-year average of subpar projects identified by self-evaluation (15.8%).”

In this evaluation, the sector most frequently cited for restructuring (including budget cuts, discontinuation, or consolidation), based on budget size, was land and transportation. Out of a total of 44.2961 trillion won, 18.3262 trillion won—or 39.1%—will be subject to restructuring. The next largest sectors were: ▲Disaster and safety (6.6024 trillion won) ▲National defense, foreign affairs, and unification (3.7149 trillion won) ▲SME finance (3.6398 trillion won) ▲Science, technology, and information and communications (3.3713 trillion won).

By ministry, the Ministry of Land, Infrastructure and Transport had the largest amount at 21.9737 trillion won, followed by ▲Ministry of Employment and Labor (3.6510 trillion won) ▲Ministry of SMEs and Startups (3.5350 trillion won) ▲Ministry of Science and ICT (3.4458 trillion won) ▲Ministry of Environment (3.2567 trillion won).

Each ministry must submit a budget proposal including at least a 15% reduction by the end of May

The government plans to incorporate the results of this integrated evaluation in the preparation of the 2027 national budget. The Ministry of Planning has already set and communicated expenditure restructuring targets for each project to all ministries based on these results. Ministries are required to submit their budget requests reflecting next year’s restructuring plans by the end of May.

For projects rated for discontinuation, the entire budget must be eliminated. For projects subject to reduction, at least 15% of the budget must be cut. An official from the Ministry of Planning said, “If all reductions and discontinuations are implemented, we estimate that total spending restructuring could reach 7.7 trillion won.”

For projects identified as needing improvement, each ministry must incorporate the required improvements specified in the evaluation report and establish a performance management improvement plan by June, which must also be reflected in next year’s performance plan. If a project is unable to meet its restructuring target for unavoidable reasons, the ministry must later submit a statement of reasons for non-compliance through the ‘Open Fiscal Policy’ portal.

Meanwhile, incentives will be provided for projects with outstanding performance. Projects selected as excellent by the evaluation team (up to 50) will be exempt from evaluation the following year, and those that receive particularly high public satisfaction and awareness in a national poll in July will see the project managers receive separate rewards.

An official from the Ministry of Planning stated, “To enhance the effectiveness of the integrated evaluation system, we plan to pursue institutional improvements in the second half of the year, including revisions to evaluation guidelines, by comprehensively addressing improvement tasks raised during the evaluation process as well as difficulties faced by ministries and the evaluation team.”

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