Institutions get improved marks

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Institutions get improved marks

Thirty-eight public institutions under close government scrutiny are following through on reforming their operations.

According to a mid-term evaluation report yesterday by the Ministry of Strategy and Finance’s committee on the operations of public institutions, the institutions have reached or exceeded their initial goals of cutting welfare spending and reducing debt this year.

Among the 38 institutions, 18 of were told by the government to slash debt, while the rest were to scale back benefits for executives and employees.

The committee said the 18 institutions cut a total of 24.4 trillion won ($22.7 billion) in debt, 4.3 trillion won more than the government expected.

The institutions adjusted business practices, sold assets and improved the efficiency of management processes, the committee said.

Of the 18 told to pare benefits, only Korea Resources Corporation and Korea Coal Corporation fell short of their goals.

Korea Electric Power Corporation got rid of 1.1 trillion won in debt by selling its headquarters and land to Hyundai Motor Group. Korea Land & Housing Corporation reduced its debt by more than 650 billion won.

Among the 20 institutions criticized by the government for excessive spending on benefits, the Korea Trade Insurance Corporation and seven others scrapped such policies as paying excessive tuition fees for employees’ children.

The five companies known for the most serious lax management - Korea Exchange, The Export-Import Bank of Korea, Koscom, Korea Racing Association and Kepco Engineering & Construction - cut an average of 52.4 million (39 percent) in benefit spending per employee this year.

The evaluation report came nearly a year after the Park Geun-hye administration warned the nation’s public institutions about lazy and unethical operations.

“The party is over for public institutions,” then-Finance Minister Hyun Oh-seok said last November, referring to rampant reckless spending by the institutions at a time when public sector debt was skyrocketing.

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

In the government evaluation of 2013 performance announced in June, 11 public institutions received an “E” grade, the lowest possible. Seven institutions received an “E” score in 2012.

However, the committee took a positive view of this year’s performance by institutions under government monitoring.

“Normalization of public institutions is successfully under way,” said the committee in the report. “Leaders of the institutions are showing great leadership and the relations between labor and management [which was considered to be a major hindrance for reform] have improved at many of the institutions.”

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