KEPCO Relocation Plan Is Finalized

The South Korean government finalized the relocation plan of the Korea Electric Power Corporation (KEPCO) on May 27. According to the plan, also known as “1+2,” the country’s biggest state-run body will be relocated to a location outside the capital city along with its two affiliates.

The government had convened a meeting of municipal and provincial governors at Prime Minister Lee Hae-chan’s official residence in Samcheong-dong, Jongno-gu, Seoul, and finalized a basic agreement on the relocation of public organizations.

According to the agreement, the government will receive applications from 11 cities and provinces that want KEPCO to move to their areas, but Seoul, Gyeonggi, Incheon, Daejeon, and South Chungcheong Province will be excluded from the list of eligible applicants. Based on the submitted applications, the government will select the location. In addition, regarding the selection of two agencies that will be relocated along with KEPCO, and the relocation of the remaining 174 public institutions, cities and provinces agreed to accept the government’s decision.

Also, the government has decided not to take the suggestion to put a radioactive waste treatment facility in the proposed relocation area of KEPCO.

“The relocation of public institutions will be decided by considering the development status of a proposed area and its strategic industrial link with the characteristics of each institution. The finalized selection, including the location for KEPCO, will be announced in the middle of next month,” according to Seong Kyoung-ryung, chairman of the Presidential Committee on Balanced National Development.

In the meantime, since the agreement viewed the impact of KEPCO’s relocation would be lower than expected at first, competition between local government bodies to attract KEPCO is likely to be decreased.

After announcing the agreement on May 27, Chairman Seong noted that a big hurdle is gone now.

This is because the relocation issue of KEPCO has been the biggest cause of friction between the central government and local governments, or among local governments. KEPCO’s relocation is expected to produce a remarkable effect that is five to six times larger than that of other public institutions.

Several working level talks and meetings between the central government and local government bodies have been held in order to review plans to leave KEPCO in the capital city, to reduce the number of existing public institutions in the area that KEPCO will be located to, and to relocate KEPCO along with a radioactive waste treatment facility.

The relocation of KEPCO was agreed upon rather easily. This is because leaving KEPCO, a symbol of state-run bodies, behind is highly likely to undermine public support for the policy of relocating public institutions outside Seoul. The problem was where to and how to relocate public institutions which had created disputes due to conflicting interests between local government bodies.

Because the agreement hit a snag, some ruling party members suggested a compromise proposal, also called as the “1+1” proposal. According to the proposal, when all 177 public institutions are relocated, each of 12 cities and provinces will have 14 to 16 public institutions in their areas, and the area where KEPCO will be relocated to will have only two public institutions: KEPCO and its one affiliate body.

In a meeting held on May 24, governors were opposed to the proposal, claiming that it would serve as a serious disadvantage to the location that KEPCO will be relocated to. It is also known that they also harshly criticized the plan to link the relocation with a radioactive waste treatment facility, saying that it would be over-intentional.

In the end, the central government and governors agreed to a plan to relocate KEPCO with its two affiliates on May 27. Regarding the reason behind the removal of linking the move with a radioactive waste treatment facility, sources said that the central government might intend to avoid criticism that the relocation area was pre-determined because the central government wanted to favor a particular area that requested approval for moving the facility to their area several times.

Chairman Seong said that in terms of the scale of the organization itself, the area that KEPCO will be relocated to will still be in a disadvantageous position.

On the other hand, this “1+2” plan might be much advantageous to metropolitan cities than to provinces. That is because several regions within a province might clash again over detail advantages.

Kang-Myoung Chang tesomiom@donga.com