ID :
208249
Tue, 09/20/2011 - 11:10
Auther :
Shortlink :
https://oananews.org//node/208249
The shortlink copeid
KEPCO needs drastic reform
SEOUL, Sept. 20 (Yonhap) -- The state-run Korea Electric Power Co. (KEPCO) is under fresh criticism that it spent huge amounts of money on advertising and promotional activities in recent years, at the same time it piled up huge losses.
According to financial statements the state utility company posted at the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART), KEPCO spent 40.77 billion won (US$35.45 million) on advertising and promotion last year, up 9.2 percent from the previous year.
The company recorded a net loss of 72.1 billion won last year, reflecting the seriousness of its lax management. Its accumulated debt reached 33.4 trillion won as of last year, up more than 60 percent from 20.6 trillion won in 2006, according to a report submitted by the Ministry of Knowledge Economy to the National Assembly.
KEPCO???s five electricity subsidiaries have also seen their debt grow sharply over the last five years, largely driven by a surge in production costs, the report showed.
Despite these chronic losses, the company's personnel expenditure increased by 12.2 percent last year to 597.7 billion won. In particular, the company's spending on employee bonuses surged 15.7 percent in 2010 to 3.32 billion won, from 2.87 billion won a year ago. KEPCO employees had a 10.7-percent salary increase on average last year, according to an official report. The expenditure for survey and analysis remained at 1.4 billion won over the three-year period.
KEPCO also topped the list of 60 public companies under the wing of the Knowledge Economy Ministry in the number of employees whose yearly salary exceeds 100 million won. Nearly 760 workers at KEPCO earn more than that amount annually.
Critics say that it is difficult to understand why KEPCO, which monopolizes the production and sale of electricity, needs to spend such huge amounts on advertising and promotion.
A lack of professional executives in KEPCO's management is another serious problem. According to Rep. Kim Jin-pyo of the opposition Democratic Party, most of the presidents and auditors of KEPCO and its 11 affiliated companies are non-experts appointed "from above." Of seven standing directors of KEPCO, five come from the political circle while 17 of 22 executives in the affiliates were appointed for their "special relationships."
Kim asserted that having such non-professional figures in management provided a fundamental reason for the massive power outages last Thursday, which could have led to a blackout of the entire country.
There is an acute need for KEPCO to drastically reform its management practices. In addition, the qualifications of top officials in the state-run company should be verified before appointment to guarantee effective management and prevent the recurrence of a disastrous situation, such as a national blackout.
According to financial statements the state utility company posted at the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART), KEPCO spent 40.77 billion won (US$35.45 million) on advertising and promotion last year, up 9.2 percent from the previous year.
The company recorded a net loss of 72.1 billion won last year, reflecting the seriousness of its lax management. Its accumulated debt reached 33.4 trillion won as of last year, up more than 60 percent from 20.6 trillion won in 2006, according to a report submitted by the Ministry of Knowledge Economy to the National Assembly.
KEPCO???s five electricity subsidiaries have also seen their debt grow sharply over the last five years, largely driven by a surge in production costs, the report showed.
Despite these chronic losses, the company's personnel expenditure increased by 12.2 percent last year to 597.7 billion won. In particular, the company's spending on employee bonuses surged 15.7 percent in 2010 to 3.32 billion won, from 2.87 billion won a year ago. KEPCO employees had a 10.7-percent salary increase on average last year, according to an official report. The expenditure for survey and analysis remained at 1.4 billion won over the three-year period.
KEPCO also topped the list of 60 public companies under the wing of the Knowledge Economy Ministry in the number of employees whose yearly salary exceeds 100 million won. Nearly 760 workers at KEPCO earn more than that amount annually.
Critics say that it is difficult to understand why KEPCO, which monopolizes the production and sale of electricity, needs to spend such huge amounts on advertising and promotion.
A lack of professional executives in KEPCO's management is another serious problem. According to Rep. Kim Jin-pyo of the opposition Democratic Party, most of the presidents and auditors of KEPCO and its 11 affiliated companies are non-experts appointed "from above." Of seven standing directors of KEPCO, five come from the political circle while 17 of 22 executives in the affiliates were appointed for their "special relationships."
Kim asserted that having such non-professional figures in management provided a fundamental reason for the massive power outages last Thursday, which could have led to a blackout of the entire country.
There is an acute need for KEPCO to drastically reform its management practices. In addition, the qualifications of top officials in the state-run company should be verified before appointment to guarantee effective management and prevent the recurrence of a disastrous situation, such as a national blackout.
