Economic feasibility is key

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Economic feasibility is key

“Economic efficiency is not the only basis for deciding the fate of presidential pledges on regional development projects,” President Park Geun-hye said during her recent visit to Gangwon Province.

The remarks came after she said she understood the growing concerns of Gangwon citizens over what would become of such projects, including the plan for a high-speed railway line between Chuncheon and Sokcho.

It’s no wonder her remarks were interpreted as a promise to push forward the projects - with eyes on the Eurasia railway plan - regardless of their economic efficiency. Park said that she sees them as a strategic matter for the country, making clear that she will put them into action.

We are extremely concerned about Park’s remarks, because she left open the possibility of reckless political implementation of projects with no economic feasibility. During her campaign, Park promised to put in the high-speed railway line as her No. 1 pledge for Gangwon province, but it failed to pass feasibility studies last year.

However, Park said it can be promoted for the sake of the nation. Due to her comments while in Gangwon, the central government won’t be able to reject the project now. Soon, a roadmap will be created and a budget will be allocated. To make up for the destined loss, large amounts of money will be spent. Some Gangwon residents may benefit, but the entire nation will have to pay for it, and for a long time.

We do not even know when the Eurasia railways project was selected as a national strategy. It’s hard to understand why the uneconomical regional pledge must be pushed forward based on this uncertain strategy. In the past, many regional projects were executed without considering economic efficiency. The Saemangeum reclamation project, regional airports and the Sejong City project are examples that turned into headaches.

On July 5, the Park administration announced its plan for regional projects, saying only those that pass feasibility studies will be implemented. But Park’s recent remarks contradicted that principle, appearing to break the latest promise. It seems that there is no need to do the feasibility studies at all because all her pledges for other regions will also have to be realized.

How can the government possibly resolve this situation? For any project that requires tax money - whether it’s a presidential pledge or not - it is fundamentally important to thoroughly calculate the economic efficiency first. Park must remember that this is her most important duty to taxpayers.

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