Extension of Deadline for Public Fund Repayment

Government is reviewing a plan to newly issue 10~20 year warranted bonds by government and provide financial support to extend deadline for public fund repayment, which is from 2003~2006. And it also tries to decide the sales of Dea Han Life and Seoul Bank in September.

Finance and Economy Minister and vice prime minister Jin Nyun said in a radio program, ``The deadline of public fund are all in certain period, so we will review a plan to extend the deadline.`` `` public fund is to help the weakness of finance and companies accumulated for a long time. It would be great if companies repay public funds well, however if it they don`t, people cannot but take all the burden.``

The chief of the finance plan section in budget department, Bae Chul-Hoo said, ``Government will try to collect public funds and also will repay public funds by issuing government 10-20 year warranted bonds. If it is necessary government will review a plan to repay public funds from government budget.``

Jin vice prime minister added, ``Early this year, we agreed with IMF to sell the government owned portion of the banks that are supported by public funds from the end of next year. But we will see those portion as soon as possible to privatize those bank although we have to suffer a bit of financial damage.`` He also said, ``We will finish the inspection on Dae Han Life by the first of September. We will also search a plan for the sales of Seoul Bank by the end of September.``

Meanwhile, according to ` 2001` public funds management plan`, government provided 137 trillion and 500 billion Won from 1997.11~2001.6, but it collected only 34 trillion and 200 billion Won, 24 percent of total.

Amount of public funds that is provided by the first and second issue of government bonds are 87 trillion and 871.7 billion won. For 4 years from 2003 to 2006, as much as 84.6 percent of total (74 trillion and 329.1 billion Won) should be repaid. The total per yearly deadline are the following: 2003` - 21 trillion and 929.7 billion Won, 2004`- 17 trillion and 781.5 billion won, 2005`-17 trillion and 980.9 billion Won, 2006`- 16 trillion and 637 billion won. In this period, government also should repay 23 trillion and 200 billion, 62.9 percent of the total loan (36 trillion and 900 billion won) borrowed for the repayment of the interest of public funds.

yhchoi65@donga.com