“Are you recreating the inefficiency of’removing and pasting’… LH reorganization’dilemma’ [부동산360]”- Herald Economy

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LH headquarters in Chungmu-dong, Jinju-si, Gyeongnam.[사진=연합]

[헤럴드경제=이민경 기자] Korea Land and Housing Corporation (LH)’s reorganization plan, which is receiving requests for organizational reorganization close to dismantling due to the land speculation in the third new city, will be in full swing this week.

According to the government on the 14th, government ministries such as the Ministry of Strategy and Finance, the Ministry of Land, Infrastructure and Transport, and the State Affairs Coordination Office are starting to discuss measures to prevent the recurrence of the LH incident from this week, and will begin reviewing plans for reorganization of the LH. Earlier, Prime Minister Jeong Sye-gyun said that he would promote innovation that would transform the dismantling level to the level of disintegration.

Some say that the LH should be divided into land and housing projects to return to before 2009 or to dismantle them altogether. As the people’s trust has been lost and the power to promote the project has declined, the organization is divided by function.

However, this has a high probability of reproducing the inefficient organizational operations of the past. The reason why the Land Corporation and the Housing Corporation were integrated to become the current LH is that the problem of duplication of work occurred as the two organizations were operated separately.

Immediately after consolidation, LH suffered from severe liquidity problems. This is because the two organizations had to bear the debt caused by the random business expansion.

Therefore, some point out that it is a short-sighted idea to put the two institutions together because of inefficiency, and to put them together again due to a new variable of land speculation by public officials. An LH employee who requested anonymity also said, “It was launched as LH by integrating Korea Land Corporation and Korea Housing Corporation in 2009 for synergy. Apart from that, organizational structural reform should be more cautious.”

A government official said, “There has not yet been a full-scale consultation within the ministries on the plan to reorganize the LH, and each has only ideas.” .

LH is a public company created by the merger of Korea Land Corporation and Korea Housing Corporation in 2009. As of the end of last year, it has 9,500 employees and only 184 trillion won in assets.

While maintaining the overall work of land development such as the supply of new housing sites and new cities, which are the core functions of LH, a plan to increase the role of local governments or local public enterprises in individual development projects is discussed. LH is a plan to allow local public enterprises, etc., who can better understand the situation of the region, to perform specific regional development projects, while only the overall sketch and nationally important projects are carried out.

Some opinions say that construction should be left to the private sector, not to compete with the private sector, among the supply of public housing. Improving the quality of rental housing has been a long-standing task for the government, and in particular, the construction of tangible integrated rental housing for the middle class is being promoted.

There is also a forecast that it will be difficult to reduce the large-scale organization at the level of dissolution for LH right away because of the 2·4 supply plan. The core content of the second and fourth measures, such as the urban public housing complex project or the direct implementation of the maintenance project by public institutions, is because LH is designed to play a leading role. As for the 3rd new city project, as of now, LH is playing the biggest role. Pre-subscription for the 3rd new town is also scheduled for July.

On the other hand, as this incident predicts intensive reforms and restructuring, the inside of LH is keen to take follow-up measures, creating a tense atmosphere.

Moreover, it is evaluated that the darkest period since its inception has been passed by two LH executive-level employees making extreme choices in succession.

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