Seoul: The government announced on Thursday a comprehensive plan to restructure state-run firms, with a focus on merging energy suppliers. This initiative aims to reduce the number of state-run institutions by 109 while ensuring job security for current employees.
According to Yonhap News Agency, the government introduced the DIET initiative, which stands for dynamic game changers, integrated entities, efficient players, and a transparent system. This initiative is a response to the industrial transformation driven by artificial intelligence and demographic changes, aiming to reduce the total number of state-run firms from 524 to 415.
"We aim to boldly overhaul around 20 percent of the existing state-run firms," stated Second Vice Finance Minister Huh Chang during a briefing. As part of the plan, five state-run 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.-will be merged into a single entity.
Moreover, the government plans to consolidate the Busan Port Authority, Incheon Port Authority, Ulsan Port Authority, and Yeosu Gwangyang Port Authority into a single entity, which will maintain four regional branches to continue their existing roles. Additionally, Korea National Oil Corp. and Korea Gas Corp. will be merged into a single organization.
In contrast, the Korea Land and Housing Corp. will be divided into two separate organizations: one focusing on land development and housing construction, and the other on housing welfare. This separation aims to address the inefficiencies of a single organization performing both speedy development functions and public-interest housing welfare functions.
The government intends to strategically reallocate workers among state-run firms while consolidating those with similar or overlapping roles. "We plan to guarantee workers' job security and ensure their wages and benefits do not deteriorate following the mergers," the government assured. "We will also proactively prepare various support measures, including enhanced welfare programs and performance-based incentives."