Updated May. 13, 2008 08:30
The Strategy and Finance Ministry yesterday said it has finalized this years reform plan on the privatization of public corporations. The ministry is reportedly fine-tuning the plan along with the presidential office.
Saying the reform could cause side effects such as utility fee hikes or a monopoly by private corporations, the ministry is discussing countermeasures with other related offices.
Under the plan, the Lee administration will strive for full privatization of 10 energy agencies, giving management to five social overhead capital entities, the partial sale of two general companies and mergers of certain public firms.
On energy firms, the government will sell private stakes in KEPCOs power generation, design and maintenance affiliates while leaving corporate governance structure to the head office.
Korea District Heating Corp. is included on the list of companies slated for privatization because of public criticism over careless management due to its monopoly in the heating sector.
Fears are also growing that privatization of energy companies will lessen government control on utility charges, leading to hikes in electricity and heating bills.
Korea Gas Corp., in particular, must compete with private companies in importing natural gas, which will raise the import price of LNG from the Middle East, say observers of the Seoul city government.
Since public firms related to social overhead capital deal with national infrastructure, the government will continue to hold ownership but privatize management control.
The government said it can improve management efficiency of The Korea Expressway Corp. and port authorities by preventing former officials from getting rehired through complete separation of their management control from the government.
The Korea Tourism Organization will sell part of its profitable business lines, including golf courses, duty free shops and casinos. Korea Water Resources Corp. will spin off its water supply management to enhance supervision.
Korea National Housing Corp. and Korea Land Corp. will be merged with no staff restructuring scheduled. Public firms with similar businesses will be also merged, including the Korea Culture & Content Agency and Korea Game Development & Promotion Institute.
An official said, Were planning to release an official reform plan for public corporations by the end of this month. Certain details might be modified in fine-tuning the plan with the presidential office, but well stick to the original plan as much as possible.