The government submitted a plan for a total of 536.3 billion won to the National Assembly as the expense limit plan for BTL project for 2015. To support the National Assembly's deliberation on the expense limit plan for BTL, the National Assembly Budget Office (NABO) estimated the government subsidy for BTL going forward and evaluated project feasibility by project facility included in the scope of the expense limit plan for BTL for 2015.
The expense limit on BTL projects conducted in 2005~2014 was 43.1399 trillion won in total including the maximum reserve amount and maximum amount for projects by local autonomous governments, and the government subsidy for projects on which execution agreements were reached was estimated at 54.778 trillion won (46.5782 trillion won to be provided in 2015 or afterwards).
The evaluation of the plan on the expense limit for BTL by project facility for 2015 found issues including the eligibility analysis of BTL projects and the lack of proper project objectives and ground data for feasibility analysis.
The eligibility analysis (VFM: Value for Money) is bound to lead to the conclusion that the project is eligible as the cost of private finance initiative (PFI) is calculated by multiplying the construction cost of the public sector comparator (PSC), etc. by the PFI application rate (PFI cost divided by PSC cost), which is lower than 1. As for the BTL project for the rehabilitation of the sewage pipe network, there is a possibility that the benefits of living environment improvement are overestimated by referring to the research conducted 15 years ago on the Han River water system which is different from the cases of Busan and Siheung that are included in the project. As for the BTL project for national universities' dormitories, there should be an objective review and reasonable ground for the necessity to improve the dormitory accommodation ratio to the 30%-range from the current 21.4%. The project for dormitory building at Daegu Gyeongbuk Institute of Science and Technology was analyzed to be in need of a precise prediction on the increase in capacity based on the introduction of a degree course, and the BTL project for housing facilities for the military showed a mismatch in the periods for PSC bid rate and average agreement rate of BTL projects.
The expense limit on BTL projects conducted in 2005~2014 was 43.1399 trillion won in total including the maximum reserve amount and maximum amount for projects by local autonomous governments, and the government subsidy for projects on which execution agreements were reached was estimated at 54.778 trillion won (46.5782 trillion won to be provided in 2015 or afterwards).
The evaluation of the plan on the expense limit for BTL by project facility for 2015 found issues including the eligibility analysis of BTL projects and the lack of proper project objectives and ground data for feasibility analysis.
The eligibility analysis (VFM: Value for Money) is bound to lead to the conclusion that the project is eligible as the cost of private finance initiative (PFI) is calculated by multiplying the construction cost of the public sector comparator (PSC), etc. by the PFI application rate (PFI cost divided by PSC cost), which is lower than 1. As for the BTL project for the rehabilitation of the sewage pipe network, there is a possibility that the benefits of living environment improvement are overestimated by referring to the research conducted 15 years ago on the Han River water system which is different from the cases of Busan and Siheung that are included in the project. As for the BTL project for national universities' dormitories, there should be an objective review and reasonable ground for the necessity to improve the dormitory accommodation ratio to the 30%-range from the current 21.4%. The project for dormitory building at Daegu Gyeongbuk Institute of Science and Technology was analyzed to be in need of a precise prediction on the increase in capacity based on the introduction of a degree course, and the BTL project for housing facilities for the military showed a mismatch in the periods for PSC bid rate and average agreement rate of BTL projects.