South Korea to cut 109 public institutions, merging five power companies and oil and gas agencies

South Korea is pursuing one of its broadest public-sector reorganizations, planning to reduce 109 institutions through mergers and other structural changes.

The government presented the plan on the third, dividing the 109 institutions into strategic structural reforms involving 15 institutions, the consolidation of similar or overlapping functions involving 11, and the integration of 83 subsidiaries and smaller agencies. Officials said the changes respond to accumulated duplication, rising debt and a need to strengthen the public sector’s competitiveness and ability to respond to changing policy conditions.

The most sweeping changes concern energy and port infrastructure. The five power companies, South East Power, Central Power, Western Power, Southern Power and East-West Power, will be merged into a single corporation tentatively called Korea Power. The Korea National Oil Corporation and Korea Gas Corporation will be combined into a proposed Energy Resources Corporation to address supply-chain risks and build an energy-security system.

The Korea Coal Corporation, which has completed the closure of all its mines with the shutdown of the Samcheok Dogye mine, will be liquidated through amendments to relevant laws. The four port authorities in Busan, Incheon, Ulsan and Yeosu-Gwangyang will also be unified into a proposed Korea Ports Corporation to strengthen international port competitiveness.

The government will first pursue measures to boost regional airports before reconsidering whether to merge airport corporations. It also plans to combine the Korea Communications Agency for Advertising and the Media Foundation for Viewers into a proposed Korea Broadcasting, Media and Communications Promotion Institute. Detailed plans will go through the Public Institutions Management Committee. Officials said workers will retain their jobs and will not see their terms worsen through the mergers.

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We will work to ensure that the public institution function-reform plan is implemented quickly, including immediate mergers for institutions that do not require procedures such as legislative amendments.