Starting this year, new projects for cultural and sports facilities, offices, and others costing less than 30 billion won, undertaken with local government resources, do not require central government review for necessity and feasibility. Additionally, joint projects involving financial contributions from more than two local governments costing less than 50 billion won will also be exempt from central government review.
The Ministry of the Interior and Safety announced on the 6th that the revised enforcement ordinance of the "local government finance act," containing these details, will be promulgated and enforced on the 7th.
The core of this revised ordinance is to expand local governments' authority to independently review investments in regional projects of concern. This change reflects opinions that the existing system for local government finance investment reviews can dampen the efficiency and effectiveness of local government investments. The local government finance investment review system is where the central government assesses the necessity and feasibility of a project before the local government's budget proposal for the project's investment is drawn up.
Specifically, local governments will be able to conduct independent reviews of cultural and sports facility construction, office building projects, festival events, and exhibition center establishment projects financed with their own resources. For metropolitan cities, projects costing less than 30 billion won, and for smaller cities, districts, and counties, projects costing less than 20 billion won are eligible. Previously, projects costing more than 3 billion to 4 billion won required central government review.
Additionally, the size of contingent liabilities, which previously required central government review regardless of amount, will be eased. For metropolitan cities, projects costing 10 billion won or more, and for smaller cities and counties, projects costing 5 billion won or more will require central investment reviews. The standards for joint cooperation projects by two or more local governments have also been relaxed to allow for independent review for total project costs under 50 billion won.
Moreover, the criteria for exempting projects subsidized by the government from investment reviews by local government finance have been relaxed. Previously, projects where the national funding proportion of total project costs was 80% or more were exempt, but now this will apply to projects with 70% or more.
Vice Minister Koh Gi-dong of the Ministry of the Interior and Safety said, "With this enforcement ordinance revision, the authority and responsibility of local governments over fiscal investment projects will be expanded," adding, "We will support local governments to independently review and assess project feasibility to swiftly pursue regional priority projects and revitalize the local economy."