Business · Economy · 1 hr ago
23 of 31 Korean projects passing review had low expected economic returns
South Korea approved 23 projects with expected benefits below their costs in a review of 31 major public projects from January 2025 to June 2026.
The projects with low expected economic returns have a combined planned cost of 28.6 trillion won.
The review checks the case for large new projects, including their economic value, before the government decides whether to proceed.
It also considers regional development, and the balance of the review has shifted toward regional growth since economic criteria were given less weight for non-capital-area construction projects in 2019.
A benefit-cost ratio below 1 means the estimated economic benefits are lower than the costs; five of six projects with a ratio below 0.5 passed.
Critics warn that approving more low-return projects could weaken the efficiency of public spending.
In May, the government lowered the economic-evaluation weight further for construction projects in areas losing population, so more low-return projects may pass under the revised rules.
South Korea’s preliminary feasibility reviews approved 23 of 31 projects whose expected economic benefits were lower than their costs from January 2025 through June 2026.
The 23 projects have total planned costs of 28.576 trillion won, raising concerns about the efficiency of public spending.
Five of six projects with a benefit-cost ratio below 0.5 passed review, with planned costs totaling 12.4915 trillion won.
The review process weighs regional balance alongside economic returns, and changes have reduced the relative weight of economic criteria for some projects.
The government revised its guidelines in May to give greater weight to balanced growth in areas with declining populations.
- Who
- South Korea’s Ministry of Planning and Budget reported the review results.
- What
- 23 of 31 projects passing preliminary feasibility review had expected economic benefits below their costs.
- When
- From January 2025 through June 2026.
- Where
- South Korea.
- Why
- Reviews assess regional balance as well as economic returns, allowing some projects with low benefit-cost ratios to pass.
This story does not have two clearly opposing sides.
The government lowered the weight of economic evaluation for non-capital-region construction projects and raised the weight of balanced regional development.
Preliminary feasibility reviews approved 31 projects, including 23 with expected economic benefits below costs.
The government revised guidelines to lower the economic-evaluation weight for construction projects in areas with declining populations and raise the balanced-growth weight.
- Projects with low expected returns
- 23 of 31 approved projects
- Total cost of those projects
- 28.576 trillion won
- Projects with benefit-cost ratio below 0.5
- 5 of 6 passed review
- Cost of five low-ratio projects that passed
- 12.4915 trillion won
- Yeongwol–Samcheok Expressway
- Cost: 5.6167 trillion won; benefit-cost ratio: 0.27
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