Kepco expands budget for safety and researchThe Korea Electric Power Corporation (Kepco), the nation’s sole electricity distributor and the fourth-largest company by market capitalization, said Wednesday it will allocate an additional 2 trillion won ($1.8 billion) in its budget this year for R&D projects and safety at its facilities.
The decision brings the state-run power distributor’s total budget for this year to 72 trillion won, about 5 trillion won larger than last year. The amount allocated for renewable energy R&D and safety is 5.5 trillion won, a 54 percent increase over last year.
“I hope the additional investment contributes to improving safety of the public sector’s energy facilities while also helping to revitalize the Korean economy and create areas for future growth,” said Kepco CEO Cho Hwan-eik.
More than 60 percent of the 72 trillion won budget will be used in the first half of the year. The safety and R&D budget will go toward inspecting facilities and is expected to create about 6,600 jobs.
Of the 5.5 trillion won allocated for safety and research, 2.1 trillion won will be spent on safety repairs and updates to the company’s electricity facilities nationwide.
The state-run energy provider plans to spend 1.8 trillion won of its added budget to compensate people who have been forced to leave their homes so that the company can build new electricity transmission stations and transformers.
About 1.3 trillion won will be put into R&D, including to build basic infrastructure for new electricity management systems and renewable energy distribution systems, and to support R&D projects of small businesses and universities working on future electricity technologies.
Cho vowed that the company will continue working to reduce its debt. Kepco said in March that it will pay off the 14.7 trillion won debt by 2017.
The additional spending sets Kepco apart from other state-owned companies, amid the central government’s push starting early last year to reduce spending at 40 debt-ridden public organizations.
The push to overhaul the public sector has led many companies to cut back on excessive benefits for high-ranking employees and to sell off unnecessary properties and abandon fruitless projects.
Market analysts say Kepco was able to reach its debt reduction goal and to increase its budget after selling its former headquarters to Hyundai Motor Group for the huge sum of 10.55 trillion won in September.
BY KIM JI-YOON [firstname.lastname@example.org]