Reasonable profits for private investors needed for infrastructure projects: official

SEJONG, March 14 (Yonhap) -- South Korea's vice finance minister said Thursday that the government should offer private investors reasonable profits for taking part in infrastructure projects.

Koo Yun-choel made the comment at the inaugural session of a consultative body made up of central government and provincial authorities. The body is meant to boost privately financed infrastructure projects.

Koo said South Korea had guaranteed "excessive profits" to private investors for their infrastructure projects, which placed burdens on ordinary people who use infrastructure built by private investors.

Private investors have financed 114.5 trillion won (US$100.84 billion) for 719 projects since 1995, when South Korea embraced privately financed infrastructure projects, according to the Ministry of Economy and Finance.

Infrastructure projects can create jobs, which in turn can boost the economy.

Still, South Korea has abolished minimum revenue guarantees to investors over privately financed projects, which has led to a decline in the scope and number of such endeavors.

Hong Nam-ki, the minister of economy and finance, said Wednesday the government will ensure 13 infrastructure projects worth 12.6 trillion won are funded so the private sector projects can break ground this year.

The projects -- which initially were slated to start after 2020 -- include a highway linking Seoul to Gwangmyeong, just southwest of Seoul, and a sewage treatment facility in Gumi, about 260 kilometers southeast of Seoul.

entropy@yna.co.kr
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