23 Local Public Enterprises Achieve Top 'A' Grade... 7 Institutions Selected for Management Diagnosis

[Financial News]  


Daegu Transportation Corporation has improved the quality of public services by actively opening train operations considering peak usage times and convenience for transportation-vulnerable groups, as well as complex sports facilities. With high-intensity management innovation and financial management, its management performance, such as operating revenue per capita and operating profit ratio, has continued to rise, securing the top position in the urban railway category for the second consecutive year.
Daejeon Urban Development Corporation has contributed to easing housing costs for the underprivileged by expanding the supply of youth and rental housing. Through financial structure improvement, it achieved a reduction in the debt ratio and an increase in the operating profit ratio compared to the previous year, earning high marks in the urban development category.
The Ministry of the Interior and Safety announced on the 6th that it held the 'Local Public Enterprises Policy Committee' on the 5th and deliberated and resolved the '2025 Local Public Enterprises Management Performance (2024 Performance) Evaluation Results and Follow-up Measures'.
Based on the evaluation by the Management Evaluation Team, the Policy Committee conducted a final review of the distribution of evaluation grades (A~E, 5 grades) and determined that 23 out of 281 local public enterprises (76 corporations, 83 foundations, 122 waterworks) received the top 'A' grade.
In the urban railway category, Daegu Transportation Corporation, in the urban development category, Daejeon Urban Development Corporation, and in the tourism corporation category, Busan Tourism Corporation, achieved the top positions.
On the other hand, institutions with poor management evaluation results were comprehensively judged on urgency and effectiveness, and selected as targets for management diagnosis through policy committee deliberation.
This year's management diagnosis target institutions include △Gwangju Metropolitan City Seo-gu Facilities Management Corporation, which showed issues in management systems such as being evaluated below 'D' grade for the past three years and having a high number of safety accidents compared to the same type, and △Mungyeong City Waterworks, which has experienced deficits and a decline in the operating profit ratio for three consecutive years, among 7 institutions selected. 
If deemed necessary, the management diagnosis target institutions will be notified of management improvement orders through policy committee deliberation for implementation.
The management evaluation of local public enterprises has been conducted annually since 1993 based on the 'Local Public Enterprises Act' to induce management innovation and enhance contributions to public services and regional development.
This year, 281 local public enterprises were evaluated, with a management evaluation team of 131 experts formed, and evaluations were conducted according to pre-disclosed evaluation indicators until July, the Ministry of the Interior and Safety explained.
In particular, this evaluation considered difficult regional economic conditions by introducing new indicators for efforts to respond to low birth rates, regional extinction, and soaring prices (such as freezing water rates), thereby increasing the importance of evaluating the 'public nature' aspect of local public enterprises.
In terms of management 'efficiency', the evaluation was strengthened by introducing new digital and innovation management indicators to improve management systems and by introducing deductions for financial soundness through the implementation of financial debt management for institutions targeted for debt reduction.
The comprehensive evaluation results showed that local public enterprises have generally improved compared to the previous year in terms of 'public nature' and 'efficiency'.
In terms of 'public nature', the unique public services of institutions, such as the increase in urban railway passenger transport, are expanding, and the establishment of dedicated organizations for environmental, social, and transparency (ESG) management, and the expansion of youth housing supply (from 3,460 units in 2023 to 6,174 units in 2024) are strengthening their public roles in harmony with the region.
In terms of 'efficiency', management systems have been streamlined through active organizational operations in response to digitalization and environmental changes, and management performance has improved, with a slight increase in operating revenue per employee despite difficult management environments such as price increases.
However, as safety and environmental fields and major business performance indicators have declined compared to the previous year, it was evaluated that proactive efforts to establish disaster and safety prevention systems tailored to the characteristics of workplaces and more active revenue generation and business management improvements are needed.
The Ministry of the Interior and Safety plans to conduct management diagnoses by forming a management diagnosis team (up to 5 people per institution) with experts such as professors and accountants, and to focus on management improvement orders through policy committee deliberation, including personnel actions for employees, business reduction, and system improvement by the end of the year.
Depending on the evaluation results, the heads of local public enterprises will receive differential evaluation pay ranging from a maximum of 400% to 0% (10-5% salary reduction for the following year), and employees will receive up to 200% to 0%.
The Ministry of the Interior and Safety plans to continue reflecting the 'Public Institution Management Innovation Plan' currently under discussion by the National Planning Committee in management evaluations to contribute to balanced regional development and innovative growth of local public enterprises.
Kim Min-jae, Vice Minister, stated, “We plan to thoroughly analyze the improvement tasks revealed through this evaluation and continue related system improvements and tailored support.”
ktitk@fnnews.com Kim Tae-kyung Reporter