President Lee Jai-yeong of Korea Land and Housing Corp.

President Lee explains how the peak salary system works before the staff at a recent meeting at the LH’s auditorium.(Photos:LH)

President Lee Jai-yeong of Korea Land and Housing Corp. (LH) held an emergency meeting for some 200 officers, including heads of head office units and regional office managers at its office in Jinju, South Gyeongsang Province.

The emergency meeting took up such issues as cost savings and the introduction of the peak salary system to create more jobs for young people in the company, only two days before Deputy Prime Minister Choi Kyung-hwan announced that state-run companies should adopt the peak salary systems first.

At the meeting, they agreed to introduce the peak salary system to all employees of the company — totaling 6,400 — expanding the system that applied to officers from the second grade.

In the meantime, LH has been able to cut its debts substantially coming into this year, and has also decided to participate in the government policy to stabilize prices for the residential houses for the general public by expanding its regional housing projects.

LH’s debts as of July 31 amounted to 93.6 trillion won, which is less than 5 trillion won lower compared to debt figures at the end of last year. The company has been able to pay off its debts around 700 billion won monthly from the beginning of this year. The state-run company’s debts have been cut by around 12 trillion won now compared to those at the end of 2013, the highest in the company’s history, and interest on the debts is now down by around 400 billion won.

LH leads all state-run companies in cutting debts, according to the National Assembly Budget Office. The office said the debts of non-financial state-run companies were down by 3.2 billion won on average with LH at the forefront with 7.2 trillion won, making a huge contribution in reducing its debts.

LH officials said they have not been playing games with the figures, but worked hard to reform their operational set up, through which they closed unnecessary units or merged similar units to cut expenses.

The company also set up the annual sales targets, and as of the end of July, the company recorded 15.8 trillion won in sales, achieving 84 percent of this year’s sales target, which is up 3.2 trillion won compared to the same year last year. 2014 was one of the best years for the company.

LH has also been saving its funds by letting private construction companies under its policy to diversify its projects. LH opted to take up such projects as the construction and management of public leasing housing, and large development projects jointly with private development companies to save some 9 trillion won. 

From the second half of this year, LH will undertake the projects that the company put on hold thus far due to its poor financial conditions. The projects include the Happiness Residents, New Stay and others that the government has been pushing to stabilize residential housing for the general public and the middle class. Those who would benefit from the government plan total around 1.35 million households until 2017.

LH also plans to release 17.76 trillion won for real estate development projects around the country, which is more than 560 billion won more than the amount originally allocated to help the economy pick up. The payment of land that LH bought from private owners to build residential homes will be paid in cash up to 300 million won, instead of bonds. LH will also do its share to develop the areas surrounding Jinju, where it is relocated to make its contribution to the local society.