National Assembly Budget Subcommittee Approves 'Eyta Myeonje Exemption' Relaxation... Threshold Raised to 100 Billion Won

The criteria for exemption from preliminary feasibility studies (PFS), which review the viability of new public investment projects, are expected to be significantly relaxed. For the first time in 24 years since the introduction of the PFS system, the ruling and opposition parties have agreed to raise the PFS target amount criteria from the current total project cost of 50 billion won to 100 billion won, and the government's financial support scale from 30 billion won to 50 billion won.

On the morning of the 12th, the National Assembly's Planning and Finance Committee, after discussing four agenda items at the Subcommittee on Fiscal Economy, passed a partial amendment bill to the National Finance Act that adjusts the criteria amount for PFS target projects. A committee official stated, "We approved the amendment to the National Finance Act today, raising the PFS target criteria for social overhead capital (SOC) and national research and development projects (R&D) to a total project cost of 100 billion won and government funding of 50 billion won."

Earlier, the Planning and Finance Committee's Fiscal Subcommittee tentatively agreed last December on a government proposal to raise the PFS criteria while reviewing eight amendment bills to the National Finance Act submitted by ruling and opposition lawmakers. The government proposal stipulates that PFS will be conducted for projects with a total project cost of 100 billion won or more and government financial support of 50 billion won or more, targeting social overhead capital (SOC) and national research and development projects (R&D).

On the 11th, the Subcommittee on Economic and Fiscal Affairs of the Planning and Finance Committee is being held at the National Assembly in Yeouido, Seoul. In this subcommittee, four agenda items will be approved, including a partial amendment to the National Finance Act to adjust the standard amount for projects subject to preliminary feasibility studies. Photo by Hyunmin Kim kimhyun81@

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Under the current system, the Minister of Strategy and Finance is required to conduct PFS for new projects with a total project cost of 50 billion won or more and government financial support of 30 billion won or more. The PFS targets include projects involving construction work, intelligent informatization projects, national research and development projects, and new projects in social welfare, health, education, labor, culture and tourism, environment, etc., that involve government expenditures of 50 billion won or more according to the mid-term project plan.

This adjustment to the PFS exemption amount will be the first revision since its introduction in 1999, after 24 years. Because of this, there are criticisms that the two major parties are pushing the bill through to pass regional pork-barrel industries ahead of the general election in a year. Previously, the Planning and Finance Committee had been in conflict over contentious bills such as fiscal rules (National Finance Act) and the Social Economy Act, and it is reported that they decided to prioritize the passage of non-contentious bills first.

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