South Korea to Improve Development Fund Allocation Process
Text of report in English by South Korean news agency Yonhap
Seoul, Sept. 7 (Yonhap) – The government said Sunday that it will improve the allocation process of state funds for resources development that has been criticized for favouring public companies.
The Ministry of Knowledge Economy said the role of the present foreign resources development financing committee will be turned over to a new consultation panel in 2009.
It said the current committee system included experts from state- run Korea National Oil Corp. (KNOC) and Korea Resources Corp. (KORES) that may have affected the distribution of funds.
KNOC has two employees in the 14-person oil and gas development loan review group, while KORES has two sitting as members in a group of 10 experts that oversee the feasibility and allocation of funds for finding overseas mineral deposits.
In 2007 the two companies received 30.5 per cent or 126.4 billion won (US$112.6 million) in loans out of the 426.0 billion won that was approved overall.
This high percentage of loans has been cited for preventing private energy and mineral resource developers from getting valuable loans for their own foreign projects.
Under the changes, no representatives from the two public companies will be allowed on the rearranged review committees that will number 15 each for oil, gas and mineral resources.
The ministry will remain in charge of approving the recommendation of the committees that is to be made up of experts in these fields, officials from the Export-Import Bank of Korea, a legal adviser and tax accountant.
Originally published by Yonhap news agency, Seoul, in English 0206 7 Sep 08.
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