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Analysis of National Finance & Programs

Title Evaluation of Road Building Sector

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    136
  • Date
    2007-01-18

 It is essential for a state to construct infrastructure in order to strengthen national competitive power in globalization era. Especially road building is one of the most critical infrastructures as it helps firms to strengthen their competitive power through reducing distribution costs and provides citizens with a better traffic network. However, overinvestment on road building brought controversial debates over it and there are disputed discussions over proper limit on investment as well. With regard to this, it is necessary to have a general evaluation of these various issues regarding road building.



As a result of evaluation through Performance Management and Program Budget System, it is found that road building sector is required for amelioration. In evaluation, it is pointed out that principal policy subjects, national financial programs and individual projects were carried out separately although they are all interrelated together. In planning, it is found that ultimate goals are not concretized enough. Moreover, in environmental realm, evaluation standards for environmental influence are so vague that evaluations for environmental influence are not objectively performed. Therefore, it is necessary to have firm evaluation standards for environmental influence, which should be considered when economic feasibility study for road building is carried out.



Besides, this report points out that demand for transportation is excessively estimated causing overinvestment in road building. Accordingly, it is required a structural reformation. Finally, this evaluation report suggests that both following problems should also be reconsidered: Korea Expressway Corporation’s ABS issue case and the combination of express highway construction, which is divided into private investment and public investment.

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