Korea Electricity and Power Co. Blew up 28 Billion Won over 4 Years

It has transpired that Korea Electricity and Power Co. (KEp) has sustained a loss worth tens of billions of won. The KE has classified recyclable wires as unusable and then has sold the wires to Veterans Association (VA) almost for nothing.

According to the report submitted by the KEP to Millennium Democratic Party’s Rep. Kim Bang-rim for the National Auditing, for almost 4 years from September of 1998 to August of this year, the KEP has classified approximately 25,000 tons of recyclable wires such as 3,670 tons of regular wire and 22,000 tons of CNCV wire as unusable. Then, it dumped them to the VA and sustained about 28 billion won of loss.

Regular wire is made up of copper line, whose surface is coated with clothes, or other materials. On the other hand, CNCV wire is a bundle of copper wires for underground burial purposes. First, a bundle of copper wires is wrapped in the inner lay, which is polyethylene coating. Then the bundle is wrapped around by other copper wires. Finally, the outer surface is coated with another material. All of these are for transmitting purpose.

According to the “Regulations on Storage of Unusable” of the KEP, the unusable wires sorted out of the used are to be disposed of at each of the 36 operational offices located nationwide. Only the reusable is sent to the main office in Seoul for recycling.

But it is reported that the Seoul office has classified 5-100% of those collected for recycling as unusable, and sold them just for 200 won (approximately 15 cents) per kg.

In case of CNCV wire, the office has only recycled the outer coating and the copper wires laid in the middle. Then, it has classified the rest as unusable following the KEP’s regulations, and also sold them for 200 won per kg.

Rep. Kim explained, “Used copper is sold for 1,550 to 2,000 won per kg. Computing the value of copper in all the wires the KEP has disposed of for the last 4 years under the classification of “unusable,” the total amount would have come to 34.2 billion won. Thus, deducting the 6.2 billion won income the KEP has made from the sale, the KEP has lost 28 billion won it could have gained.”

In response, the KEP explained, “The regular wire we have sold is the one damaged during transportation to the Seoul office or storage at the office. Therefore, we have classified the wire as unusable and sold it.”

With regard to CNCV wire, the KEP contended, “According to the regulations implemented in 1995, the inner coating and the copper wires inside it are considered and treated as unusable. The inner coating “polyethylene” is a kind of hazardous material and, thus needs special facilities for its storage. Therefore, we have disposed of it economically the best way.” But a high-ranking official of the KEP pointed out, “The KEP is the biggest public company in Korea. Isn’t it absurd that the huge company, unable to handle the relatively small amount of wire, has sold the gigantic amount of copper almost for nothing? The fundamental problem is with the regulations.”

Rep. Kim said, “The KEP could have made considerable amount of profits if it had peeled off the inner coating of the CNCV wire and sold it. By that way, it could also have saved a lot of its budget. It should change its regulations to the extent that the copper can be reused in the future.”

The unusable wire produced by the KEP, it is reported, has been sold to the VA under the agreement consummated in 1989. Then, the VA makes new products and markets them

Dong-Yong Min mindy@donga.com