[Sejong = E-Daily Reporter Song Ju-Oh ] Prime Minister Han Seong-suk announced on the 3rd that she would push forward with a functional reform plan to relocate approximately 350 public institutions from the Seoul metropolitan area to regional areas and consolidate 109 public institutions.

At a press conference held that day at the Seoul Government Complex, Prime Minister Han announced the direction for the second phase of relocating central administrative agencies and public institutions, as well as plans to promote functional reform of public institutions. She stated, “The root cause of the many problems—both large and small—currently facing South Korea lies in the Seoul metropolitan area’s monopolistic structure and regional imbalance.” She went on to emphasize that while the Seoul metropolitan area has reached a state of saturation due to excessive concentration of population, capital, businesses, and infrastructure, regional areas are facing the threat of depopulation, adding, “Balanced growth is not a matter of choice but a survival strategy for a sustainable Republic of Korea.”

The government will first relocate central administrative agencies located in the Seoul metropolitan area to Sejong Special Self-Governing City starting in the first half of 2027, prioritizing those with a large scale and significant ripple effects. The plan is to construct the Presidential Office in Sejong by August 2029 and ensure the smooth completion of the National Assembly’s Sejong Parliament Building by 2033, thereby completing the administrative hub complex.

Regarding the relocation of public institutions to the provinces, the government will announce a relocation plan in the fourth quarter of this year—covering approximately 350 institutions in the Seoul metropolitan area and guided by the principle of minimizing the number of institutions remaining in the region—and begin the process in 2027. Prime Minister Han stated, “We will avoid a ‘divide-and-conquer’ approach to allocation and, like gathering energy around a campfire, concentrate resources centered on innovation cities to maximize the strength of regional hubs.”

Regarding the reform of public institution functions, Prime Minister Han announced, “We will reduce the number of public institutions by 109—the largest reduction in history—through strategic structural reforms to strengthen global competitiveness, the consolidation of similar or overlapping functions, and the merger of small-scale institutions.” While each ministry will develop its own roadmap, the policy is to “immediately begin implementation for institutions that do not require procedures such as legislative amendments.”

Heo Jang, Second Vice Minister of Finance and Economy, noted that the reduction would amount to approximately 20% of all public institutions and outlined three key directions for implementation. Vice Minister Heo said, “We will merge the five power generation companies into a single entity to achieve a major energy transition centered on renewable energy, and we will consolidate the four port authorities—which performed similar functions but were scattered across different regions—into a single entity to enhance international port competitiveness.”

In addition, excessively fragmented agencies with similar or overlapping functions will be consolidated to unify administrative service windows, and overseas offices of public institutions will be physically and functionally consolidated to provide one-stop services to export companies and Korean expatriates. Duplicate tasks handled by subsidiaries and small-scale agencies will also be consolidated.

Citing the proliferation of AI, the restructuring of global supply chains, the climate crisis, low birth rates and an aging population, and the decline of local communities as the background for the reforms, Vice Minister Heo explained, “We will streamline similar and overlapping functions, eliminate non-core functions, and organically connect dispersed functions.”

The government plans to guarantee employment continuity for employees of the merged and consolidated agencies and ensure that their compensation and other benefits are not reduced. Vice Minister Heo stated that the government will devise support measures, such as strengthening welfare benefits and providing management evaluation incentives, and will also prioritize communication with the labor-management consultative body and the labor unions of each agency.

Prime Minister Han stated, “Just as with the relocation of the Ministry of Oceans and Fisheries to Busan and the integration of KTX and SRT, we will ensure that the public feels the impact and that tangible results are achieved as soon as possible,” explaining that the Ministry of Finance and Economy, the Ministry of Public Administration and Security, and the Ministry of Land, Infrastructure, and Transport will lead the relevant policies, while a consultative body of relevant ministries under the Prime Minister’s Office will oversee the process. He went on to say, “For the successful second phase of the relocation of central administrative and public agencies and the reform of public agency functions, it is essential that the National Assembly deliberate on and approve the relevant budget and swiftly amend the relevant laws and regulations,” and requested the National Assembly’s cooperation.