Ministry to reevaluate plans for regional institutional establishments

The government will reevaluate its initial plan of establishing regional national institutions and redraw it from scratch after thorough feasibility studies and reviews, the Ministry of Strategy and Finance said Monday.

President Park Geun-hye pledged in her election campaign that her government would establish or relocate some national institutions to provinces to spur regional growth.

Its initial proposal included building a national rehabilitation hospital in Ulsan, and a national aerospace technology institute and national science and technology institute in South Gyeongsang Province.

However, such plans will likely lead to an increase in government spending amid growing calls by the president for expenditure cuts to achieve fiscal balance within her term.

The renewal of its regional institutional establishment proposal follows last week’s announcement of its regional spending scheme over the next five years.

The government said it planned to allocate some 124 trillion won ($108 billion) to 167 regional projects and businesses. It added that it would invite the private sector via a combination of build-transfer-lease and build-transfer-operate projects for regional infrastructure development. The government’s regional spending and institutional reevaluation comes after its 135 trillion won spending scheme planned for welfare expansion and economic recovery.

The Finance Ministry said the government would reevaluate the institutional establishment proposal by giving priority to those that can contribute to regional growth.

It will thoroughly reorganize its plan by evaluating national institutions that were in the pipeline for regional establishments according to their importance and urgency.

The central government will discuss the matter with regional offices and decide whether some should be set up as a national or regional institution, or if the private sector should be allowed to invest in and manage some.

However, this is likely to trigger tension as regional provincial constituents had been eager to see national institutions set up in their hometown for growth.

By Park Hyong-ki (hkp@heraldcorp.com)