The government said on the 3rd in its plan to push public institution function reforms that it would reconsider integrating Incheon International Airport Corporation (IIAC) and Korea Airports Corporation (KAC). It also said Korea Land & Housing Corporation (LH) would be split into two agencies dedicated to dwellings construction and residential welfare.
The government said it would reduce the number of public institutions by 109 by 2030. It follows President Lee Jae-myung's call after taking office to merge or close public institutions with overlapping or similar functions. A government official said the expansion of public institutions' organizations and staff and the resulting accumulation of liability increase the public burden and serve as a potential fiscal risk factor.
The plan includes integrating the five power generation companies (Korea South-East Power (KOEN), Korea Midland Power (KOMIPO), Korea Western Power (KOWEPO), Korea Southern Power (KOSPO), and Korea East-West Power (EWP)) and the four port authorities (Busan, Incheon, Ulsan, and Yeosu-Gwangyang), and merging Korea National Oil Corporation (KNOC) and Korea Gas Corporation (KOGAS).
◇ No to the integration of "Incheon Airport-Korea Airport Service-Gadeokdo Corporation" pushed by politicians
By contrast, the government decided not to pursue integrating local airport corporations such as Incheon International Airport Corporation (IIAC) and Korea Airports Corporation (KAC). The integration of public institutions operating airports had been pushed by politicians. Because the operating model is "international flights at Incheon Airport" and "domestic flights at Gimpo plus local airports," only Incheon Airport posts a surplus, which, they argued, should be addressed by integrating the two agencies.
Instead of integrating the public institutions, the government said it would prepare a plan to revitalize local airports. To do so, it plans to form an Airport Strategy Council with participation from the Ministry of Land, Infrastructure and Transport (MOLIT), Incheon International Airport Corporation (IIAC), Korea Airports Corporation (KAC), and the Gadeokdo Construction Corporation. However, it will split off the security functions of Incheon International Airport Corporation (IIAC) and Korea Airports Corporation (KAC) to create a dedicated aviation security agency.
◇ LH to be split again 17 years after integration
The government decided to split LH into the Housing and Urban Development Corporation, which will handle dwellings supply, and the Housing and Urban Asset Corporation, which will be dedicated to residential welfare. It will be split again 17 years after Korea Land Corporation and Korea Housing Corporation were merged in 2009 to form today's LH.
A government official said that as one agency pushed both dwellings supply and residential welfare, the speed of dwellings supply slowed and the burden of operating rental dwellings increased, adding that it plans to resolve this by separating the functions of land development and dwellings construction from the functions of residential welfare and asset stockpiling.
The government decided to use part of the development profits of the Housing and Urban Development Corporation as a resource for residential welfare. To this end, it plans to set aside part of the development corporation's profits in a separate account within the housing & urban fund. The housing & urban fund will then make a contribution to the Housing and Urban Asset Corporation.