'Generous SOC' initiatives during elections

In January 2019, the government announced the 'National Balanced Development Project' on a large scale. The purpose was to foster various strategic industries and expand infrastructure to increase regional industrial competitiveness and improve living environments. The justification was plausible, but the key concern was that it would allow large-scale Social Overhead Capital (SOC) projects in the region to be implemented without a preliminary feasibility study. Consequently, projects worth a staggering 24.1 trillion won, including the Southern Inland Railway and Saemangeum International Airport, were exempted from the preliminary feasibility study. Naturally, widespread criticism arose, suggesting that it was a maneuver aimed at the 21st general elections in 2020, which was just one year away.

Since then, the exemption from preliminary feasibility studies for large-scale SOC projects has become a recurring occurrence. While such exemptions were previously sporadic, in recent times, they give the impression of evolving into a 'practice.' In a notable decision, the government opted to proceed with the Busan Gadeokdo New Airport project—pledged by each candidate during the last presidential election - without a preliminary feasibility study. Additionally, the Moonlight Inland Railway project and the Southeast Regional Metropolitan Railway project, for which special legislation has recently been promoted, are also premised on the 'exemption from the preliminary feasibility study.'

The progress of SOC projects that have not undergone a preliminary feasibility study is a matter of concern. Since the exemption of Saemangeum International Airport from the preliminary feasibility study, critics have pointed out that its demand overlaps with that of nearby Muan Airport. Despite being pushed forward under the pretext of necessity for the Saemangeum World Scout Jamboree, no significant progress was made until the jamboree event, and the first shovel had not even been taken. In the case of the Southern Inland Railroad, where the preliminary feasibility study was exempted, the initial project cost was anticipated to be 4.7 trillion won. However, the project cost later increased by 2 trillion won, leading to a comprehensive reexamination of its business plan adequacy. Furthermore, the completion date is expected to be postponed from the initially projected 2027 to 2030.

Criticism of the preliminary feasibility study system hindering balanced regional development has been persistent. The primary criterion in a preliminary feasibility study is an economic analysis that calculates benefits versus costs. Naturally, securing economic feasibility is challenging in regions with small populations and low demand. In response to this challenge, in 2019, the weight of regionally balanced development was increased by five percentage points to 30-40% for non-metropolitan area projects only. However, some argue that it remains difficult for local projects to pass the feasibility test. A notable concern is that since the metropolitan area is not given weight for balanced regional development, the current structure of the preliminary feasibility study system may exacerbate the imbalance between the south and north of the Han River.

The preliminary feasibility study system, introduced in 1999 and now 25 years old, may need reassessment to ensure it aligns with present-day realities. Recognizing existing problems and adjusting to reflect current conditions can improve its effectiveness. It is crucial to emphasize that the preliminary feasibility study serves not only as a decision-making procedure for project advancement but also as a means to sketch a rough outline of the project and evaluate the efficiency of the business plan. SOC projects promoted without adequate scrutiny are prone to encountering escalated project costs and plan alterations. This results in the wastage of taxes paid by the public and leaves local residents in anticipation without fulfilling the promised outcomes.

Concerns about 'careless SOC' projects are already surfacing ahead of the 22nd general elections. If this trend persists, there is a risk that the election discourse will again be filled with unfulfilled promises regarding the location and nature of railroad and road construction. It is crucial for both the government and politicians to recognize that deciding on SOC projects without proper review results in losses for both the public and local communities.