This study is intended to figure out the problems related to the profit-oriented public projects run by the local governments in Korea and to make suggestions to address them The problems in the profit-oriented public projects might be mainly divided ...
This study is intended to figure out the problems related to the profit-oriented public projects run by the local governments in Korea and to make suggestions to address them The problems in the profit-oriented public projects might be mainly divided into three parts: (1) the problems related to the selection of areas for the projects; (2) the problems in planning stage for the projects; and (3) the problems in the management of the projects. The followings are the details of each problem.
First, the problems related to the selection of areas for the projects are (1) the difficulty in judging and choosing the possible areas for the projects which consult the public interest and pursue the profit simultaneously; (2) the encroachment upon the private sectors as results of the expansion of areas in profit-oriented public projects; (3)the low supporting efforts of local government in developing the new areas of the projects; (4) the absence of pre-analysis for the selection of the project areas from the perspectives of the economic and social spill-over effect and the investment effect; and (5) the biased trends to lean upon the certain areas which are easy to manage.
Secondly, the problems related to the planning stage are (1) the uncertainty in responsibility for the failure of the projects as well as the absence of preparatory alternatives for the failure; (2) the establishment of unrealistic plannings without sufficient validity analysis or on the basis of overrating the expected profits; (3) the establishment of unresonable plannings without the guarantee of financial resources for investment and the sufficient considerations of regional characteristics: (4) the difficulty of continuous promotions of the projects due to the lack of specific plannings, long-term or mid-tern plannings.
Finally, the problems related to the management of the projects are (1) the lack of management ability of local officials in running the projects; (2) the lack of special manpower for managing the projects;(3) the inefficiency caused by the rigidity in enforcing the system; (4) the lack of local officials` enthusiasm and business-mind; (5) the local officials` inactive attitudes in running the projects mainly focusing on the maintenance of the status quo; (6) the preponderance on making short-term profits rather than on the long-term investment to the projects or management renovations; (7) the difficulty in providing systematic and persistent guidances due to the variety of the blanket posts; (8) the compilation of the budget with the priority of working expenses such as personnel expenses, maintenance expenses, because of insufficient investment to the projects: (9) the lack of ability in the performance appraisal of the projects; (10) the environmental damages or exhaustion of natural resources as results of the excessive promotion of the projects.
The alternative suggestions to address or improve these problems can be divided into two parts: (1) the selection of appropriate projects and the development of new project areas; and (2) the renovation of management in running the projects. The suggestions for the selection of appropriate projects and the development of new areas are (1) the projects which are lack of public interest should be run by the private sector; (2) the projects with intense competition in the market should not be promoted as the profit-oriented public projects; and (3)the projects in which institutional or natural hindrances are in the entry of private companies should be run as the profit-oriented public projects.
The specific alternatives for the renovation of management are (1) setting up the posts in the local governments, which assume full responsibilities of the profit-oriented public projects: (2) the establishment of the special accounts for the profit -oriented public projects and the guarantee of the resources for investment; (3) reforming the related system and enhancing the flexibility of applying the system; and (4) enhancing the abilities of management and business mind of the local officials in charge of the projects.