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Parliament to Discuss Privatization Measures in Sept.

Posted June. 25, 2008 07:13,   


The government and the ruling Grand National Party yesterday said the National Assembly will deal with the privatization of state-owned corporations at a regular session in September.

They will also gauge public opinion for around two months before the session. The government will gradually pursue reform measures instead of handling all public companies at the same time.

The original plan had been to announce the privatization measures this month.

A government source said, “We’ll certainly pursue the measures but in three stages of collecting public opinion: formulating and announcing improvement measures and then discussing them at the regular parliamentary session.”

The presidential office will push forward President Lee Myung-bak’s reforms such as deregulation and streamlining state-run firms, but will also adjust the pace of implementation.

The source said, “There can be exceptions, but reform measures should be implemented as planned. However, the government will adjust the pace and extent of reform.”

The presidential office, especially the newly created position of senior presidential secretary for national planning, has begun a partial reorganization of measures to streamline state-run corporations.

Instead of streamlining all state-run corporations, the presidential office will consider the management performance and competitiveness of each firm to determine whether to privatize or transfer only the managerial function to the private sector, following Singapore’s Temasek model.

While collecting public opinion, Seoul will not consider privatizing all state-run firms. After selecting public companies whose privatization or streamlining plans are expected to draw public support, more state-run companies will be included in the streamlining plan.

To reduce resistance from the public sector and strengthen mutual understanding, the government is considering talks with the unions of state-run corporations subject to streamlining.

Ruling party member Choi Gyeong-hwan said, “At least five or six years are needed to privatize state-run corporations. Given that, it is not right to fuel unproductive dispute by announcing the privatization or streamlining of all state-run corporations.”

The government and the ruling party will announce streamlining measures for state-run corporations in September and revise laws on running state organizations, Korea National Housing Corp. and Korea Land Corp. at the regular session of the National Assembly.

Talks will also be held with provincial governments whose innovative city projects will be affected by the privatization of certain firms.

A source from the presidential office said, “The government is considering measures to compensate provincial governments whose innovative city projects will be suspended when state-run corporations change their plans and cancel moves to such areas due to privatization measures.”

As a part of the measures, municipalities could be allowed to use the land for innovative city projects for their own purposes.

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