Starting in June, social infrastructure (SOC) projects under 100 billion won will be exempt from preliminary feasibility studies. The government is raising the threshold from 500 billion won—unchanged since the system's introduction in 1999—for the first time in 27 years, aiming to expand small and medium-sized projects closely tied to local communities.
For SOC projects in 89 municipalities designated as population-declining areas, the government will provide incentives by reducing the weight of economic feasibility assessments while increasing the weight of regional balance evaluations. Rural areas with smaller populations have often failed to secure infrastructure improvements due to low scores in economic assessments. The changes are intended to lower barriers so that projects can proceed even if they are not commercially viable.
However, some fiscal experts warn that populist SOC pledges could proliferate during every election cycle.
The Ministry of Planning and Budget held its "3rd Fiscal Project Evaluation Committee" meeting on the 10th to discuss the "Preliminary Feasibility Study Reform Plan."
The government first decided to ease the criteria for SOC preliminary feasibility studies. These studies evaluate economic effectiveness when pursuing large-scale fiscal projects, screening out SOC projects with poor viability. Critics have argued that overly strict standards have slowed smaller projects. Until now, SOC projects including roads, railways, and ports were required to undergo preliminary studies if total project costs exceeded 50 billion won and government funding exceeded 30 billion won.
Rising construction costs have also made the system less realistic. Over the past five years (2020-2024), the average annual project cost for SOC projects applying for preliminary studies reached 987.4 billion won—more than double the figure from 15 years earlier (2005-2009). Starting in June, the government will raise the threshold to 100 billion won in total costs and 50 billion won in government funding.
Of the 158 total SOC preliminary feasibility study projects over the past decade, 17 (10.8%) were under 100 billion won. Notable examples include the Pohang Yeongil Bay Port international passenger terminal construction, Heuksando Port construction, Gimpo Hangang Cinepolis industrial complex access road, Soraepogu Port construction, Seosan military airfield civilian facility installation, and mountain road expansion projects. Going forward, similar projects can proceed with only a feasibility review by the responsible ministry instead of a preliminary study.
The government also introduced measures to promote regional balanced growth. For projects in population-declining areas under the Regional Balanced Development Act, the economic feasibility evaluation weight will be reduced by 5 percentage points while the regional balance evaluation weight will be increased by 5 percentage points. The 89 eligible municipalities include four in the Seoul metropolitan area—Gapyeong and Yeoncheon in Gyeonggi Province, and Ganghwa and Ongjin in Incheon—plus 85 non-metropolitan areas including Goseong in Gangwon, Jecheon in North Chungcheong, Gochang in North Jeolla, and Goryeong in North Gyeongsang provinces.
A new evaluation category assessing regional growth contribution will also be introduced for all construction projects, including SOC and buildings. This addresses criticism that existing balanced development assessments were too heavily skewed toward quantitative evaluation. A qualitative "balanced growth effect" assessment reflecting regional characteristics, cultural resources, and future growth potential will be introduced starting next year. Projects meeting certain standards will receive priority selection for preliminary studies or exemption through Cabinet approval.
"There have been criticisms that preliminary feasibility evaluations insufficiently considered the unique characteristics of non-metropolitan areas and special circumstances within the metropolitan region," said Kim Myung-joong, Director of Fiscal Investment Review at the Ministry of Planning. "This reform will reflect regional characteristics and future growth potential in evaluations, enabling more precise review of various project types including culture, tourism, and business infrastructure."
The evaluation system is also being reformed to support projects advancing national agendas. The aim is to address the difficulty of reflecting characteristics of social, cultural, and industrial sectors, as policy effect evaluation criteria were previously centered on SOC projects. Assessments will be customized by project to evaluate various ripple effects across economic, social, and environmental dimensions.
In line with artificial intelligence expansion, IT projects will shift to cost-effectiveness analysis, with the preliminary study period shortened from eight months to six. A new exemption provision will be created for simple replacement projects due to hardware and software obsolescence. Economic analysis standards including traffic project analysis periods and construction cost unit prices will be refined.
However, concerns persist that fiscal laxity could worsen. A former senior official from the Ministry of Economy and Finance warned: "Even now, there are far too many wasteful projects because the national budget funds SOC projects. If preliminary feasibility standards collapse further, money that should go to more urgent projects could be wasted."
