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| KEPCO CEO Cheong Seung-il speaks during a meeting of the National Assembly's Trade, Industry, Energy, SMEs, and Startups Committee held at the firm's headquarters in Naju, South Jeolla Province, Tuesday. Yonhap |
By Lee Kyung-min
Debt-ridden Korea Electric Power Corp. (KEPCO) came under heavy criticism during an audit by the National Assembly, Tuesday, over its failure to maintain financial soundness and oversee energy voucher programs, as well as over the collusion of a group of company officials seeking a stable post-retirement source of income.
The lax management and oversight failures will further the criticism of the country's largest state-run energy firm, as fueled by recent electricity rate hikes, the first in a series of steady increases in energy prices over the coming years.
KEPCO says the hikes are inevitable to mitigate the estimated operating loss of about 30 trillion won ($20.9 billion) for this year, a result of unexpected global geopolitical volatility taking a turn for the worse.
However, taxpayers are furious that KEPCO is passing the increase onto the public, all the while its employees are splurging on dining out with corporate credit cards and taking family trips for "training" when the expenses are really used for tourism and buying personal gifts.
CEO grilled
"We will push for drastic measures to overhaul the current management system, coupled with efforts to fortify firm financials," KEPCO CEO Cheong Seung-il said during a meeting of the National Assembly's Trade, Industry, Energy, SMEs, and Startups Committee held at the firm's headquarters in Naju, South Jeolla Province, Tuesday.
"The gravity of the recent global energy crisis is comparable to that of the oil shock a few decades ago. We will establish a system whereby innovative research and development will be used to secure core technologies in a timely manner, thereby enhancing the competitive edge of the energy industry."
But lawmakers of both ruling and opposition parties presented evidence and allegations about the firm's incompetent management.
According to Rep. Yang Hyang-ja, an independent lawmaker, about 2,900 unqualified households were granted a 30 percent reduction in electricity rates between 2017 and 2021, wasting 283.2 billion won of taxpayers' money.
The system was designed to lower the burden for families with children aged under three for up to three years, but the benefit program was not withdrawn even after the families had moved away.
"The program should have been terminated immediately after the families changed addresses, but KEPCO was indifferent to follow up," she said.
The irresponsible policy execution speaks volumes of KEPCO's carelessness in managing taxpayers' money, she added.
"The state-run firm may consider raising electricity rates as the easiest and surest way to offset mounting losses, but the public will not tolerate incompetence of this sort any longer," she said.
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