Public Housing and Land Firms to Merge

Korea National Housing Corp. and Korea Land Corp. will be merged, putting an end to the drawn out controversy over their overlapping functions.

New Seoul Country Club, Korea Asset Investment Trust, Korea Real Estate Investment Trust, Korea Construction Management Corp. and Kyongbuk Tourism Development Corp. will be privatized.

An ad-hoc committee under the Strategy and Finance Ministry announced yesterday the first-stage privatization plan at the government complex in Gwacheon.

Among 319 state-run organizations, 41 will undergo streamlining in the first phase of public sector reform, including those receiving state funds. Twenty-seven will be privatized, two will be merged, and 12 will have their functions reorganized.

The Financial Services Commission by the end of the month will decide the fates of 14 state-owned companies bailed out by the government in the wake of the 1997 Asian financial crisis, based on market conditions. They include Daewoo Shipbuilding & Marine Engineering, Ssangyong Construction and Woori Finance Holdings.

State-owned financial firms such as the Korea Development Bank and Industrial Bank of Korea and their affiliates will be sold to private firms. Incheon International Airport Corp. will be gradually privatized after a 49-percent stake is sold off.

On the controversial restructuring of Korea National Housing Corp., Korea Land Corp., the Korea Tourism Organization, Incheon International Airport Corp. and Industrial Bank of Korea, the committee will confirm final plans after gathering opinions from relevant organizations. But the basic direction of the reform will not change.

The fate of public firms excluded from the announcement will be known at the end of the month, when additional plans will be announced. Organizations needing market competition or inviting conflicting opinions will be included in the third-stage reform scheduled to be announced early or mid-September.

Vice Finance and Strategy Minister Bae Kook-hwan said, “About 100 companies will be affected by the reform plan.”

The government initially sought to overhaul 33 state-owned companies, but eight were added at the request of the ruling Grand National Party at a meeting yesterday morning.

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