Public institution party apparently not over yet

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Public institution party apparently not over yet

Contrary to the government’s strong determination to root out lax management practices at public corporations, some public entities are still throwing so-called “incentive parties” despite their increasing debt.

According to Kang Dong-won, a lawmaker of the New Politics Alliance Party yesterday, some public corporations under the Ministry of Land, Infrastructure and Transport paid larger incentives to the chief executive officers of 22 public corporations, although their debt rose last year.

In total, the institutions paid about 1.57 billion won ($1.54 million) to the heads, the report showed.

Korea Land & Housing Corporation (LH) is one public institution blamed for excess debt. But it turned out LH CEO Lee Jai-young received 126 million won in incentives last year, compared to 121 million won in 2012.

During the same period, the company’s debt grew from 138 trillion won to 142 trillion won.

Korea Water Resources Corporation (K-Water) is saddled with 13 trillion won of debt. However, the former CEO took 124 million won in incentives last year. Although the total incentives were reduced from the previous year’s 159 million won, the lawmaker criticized that amount as still huge in light of the company’s heavy debt.

Korea Expressway Corporation’s former president received 124 million won worth of incentives last year, too. His company has 25 trillion won of debt.

Korea Airports Corporation former CEO and president was found with the largest amount of incentives at 220 million won last year. The corporation is financially healthy, though, the report said.

Incheon International Airport Corporation’s former CEO got 188 million won as incentives and the Korea Appraisal Board’s former CEO took 139 million won in 2013.

“It’s hard to understand why they took more incentives while they were demanding financial support from the government,” said Kang.

The lawmaker’s findings come as preparations accelerate for the National Assembly’s probe into each ministry and affiliated organization next month.

The amount of incentives is based on annual evaluations by the Ministry of Strategy and Finance.

“The party is over for public institutions,” said Hyun Oh-seok, former deputy prime minister for economy and finance minister, last November as part of his warning to lax institutions. The government last year concluded that a large part of national debt stems from the public institutions.

Total debt at Korea’s 295 public institutes, corporations and quasi-governmental organizations shot up from 290 trillion won in 2008 to 493 trillion won as of late 2012.

“Since the evaluations of the public institutions take place from March through June based on their performance the previous year, the ministry’s evaluation results that were announced in November last year may not reflect the government’s intention,” said Cho Bong-hwan, a director general at the Finance Ministry. “From this year, the evaluation of public institutions will be made as the government intended and incentives will be adjusted.”


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