Key facts
- South Korea's government will merge and restructure state-run firms.
- The plan aims to reduce the number of state-run institutions by 109.
- Five power generators will merge into one company.
- Four port authorities will merge into a single entity.
- Korea National Oil Corp. and Korea Gas Corp. will be consolidated.
- Job security and benefits for current employees are guaranteed.
The South Korean government announced a significant restructuring initiative for its state-run companies, dubbed the DIET initiative, which stands for dynamic game changers, integrated entities, efficient players, and a transparent system. This plan aims to address industrial transformation driven by artificial intelligence and demographic shifts.
Key components of the restructuring include merging five major power generators: Korea South-East Power Co., Korea Midland Power Co., Korea Western Power Co., Korea Southern Power Co., and Korea East-West Power Co., into a single entity. Additionally, the Busan Port Authority, Incheon Port Authority, Ulsan Port Authority, and Yeosu Gwangyang Port Authority will be consolidated into one organization with four regional branches. The Korea National Oil Corp. and Korea Gas Corp. are also slated for consolidation into a single company.
In contrast, the Korea Land & Housing Corp. will be divided into two separate organizations. One will focus on land development and housing construction, prioritizing speedy project implementation, while the other will concentrate on housing welfare, emphasizing public interest. The government stated this separation is to address inefficiencies arising from a single entity performing both functions.
Overall, the blueprint is expected to reduce the total number of state-run institutions by 109 through the consolidation of organizations with similar roles. The government has committed to guaranteeing job security for existing workers, ensuring that their wages and benefits will not deteriorate following the mergers. Proactive support measures, including enhanced welfare programs and performance-based incentives, will also be provided.