Korea’s energy industry privatisation may be delayed

Jan 06, 2003 01:00 AM

The Kim Dae-jung administration’s energy industry privatisation drive may be delayed considerably with the launch of the next administration in February next year. The Ministry of Commerce, Industry and Energy (MOCIE), at a business briefing for the presidential transition committee, reported that it would implement the Kim Dae-jung administration’s reform plan for the energy sector as planned.
According to the MOCIE, it intends to revise and flexibly adjust the timing and methods through consultations with the Roh Moo-hyun administration. It reported that it is currently pursuing disposal of Korea South-East Power, one of the five power generation affiliates of state electricity monopoly Korea Electric Power Corp. (KEPCO) and has tendered three bills on the restructuring of the local gas industry to the National Assembly.

However, President-elect Roh has been revealing a prudent or lukewarm stance on privatisation of public utility sectors, such as railways and power generation, although heasserted since late last year that he agrees to the principle of privatising public companies to boost their competitiveness by introducing competition in the local energy market. Thus, the possibility of postponement of splitting off KEPCO and privatisation of the local energy industry can’t be ruled out.
The MOCIE also proposed establishment of a pan-government industrial competitiveness meeting, in which the president, related economic ministers and industry representatives would meet regularly to discuss ways of boosting the competitiveness of local industries over the next 2-3 years.

The ministry explained that the meeting would handle pending issues such as provision of foreign labour and experts to resolve the chronic labour shortage at small and medium-sized enterprises (SMEs), provision of support such as tax breaks to SMEs and venture start-ups, resolution of management-management problems and fostering of knowledge-based industries.
The government plans to let the market absorb the shockfrom the sharp surge in oil prices if the Dubai international oil price surpasses the $ 30-per-barrel level, but if it skyrockets to more than $ 35 per barrel, the administration would release oil reserves while considering provision of tax breaks and issue power-saving notifications. Meanwhile, on the possibility of merging the MOCIE with the Ministry of Information and Communication, experts in the transition team said there were no plans for such a move at the moment.

Source: Korea Times
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