In an attempt to expand cultural facilities and receive financial support from the central government, local governments once scrambled to invest in BTL (build-transfer-lease) projects for cultural facilities. But because some of the investments were not preceded by a thorough review and preparation, the local governments are having difficulties in operating the facilities due to insufficient contents and experts. This report looked into 27 cultural facilities such as libraries, museums and art centers which have been built and operating since the introduction of the BTL project in 2005 and analyzed what are the problems and the takeaways from a policy point of view.
The first problem identified is the inadequate feasibility study. Local governments pushed ahead with the BTL projects only from a policy perspective, rather than assessing the business-wise feasibility, and failed to provide sufficient supporting data for the cost analysis. As a result, they ended up building cultural facilities that are larger than the cultural demand, which in turn led to poor performance. The Korean government should develop and provide a system for local governments to assess the economic feasibility of a project and determine whether it is eligible for private investment.
The second problem is the inefficiency in the repair and maintenance of facilities. As the parties responsible for the operation and the repair and maintenance are different, it is difficult to repair defects in a timely manner and make additions or modifications to the facilities. Because cultural buildings tend to be atypical, it is hard to define roles & responsibilities between the two parties. While they fight over R&R, timely service is sacrificed. To address this problem, it is necessary to have a system to invite experienced experts from the initial stage of a BTL project. It will save the project owners trials and errors and help minimize the problems that may arise once the cultural facility starts operating. It is also recommended to establish and operate a joint steering council between the two parties for a smooth resolution of the problems caused by the dual-management system and for the mutual understanding and cooperation in running the facility.
The third problem is a lack of performance monitoring and evaluation by the central government. As there is no content-wise support provided by the central government for local governments, the central government is not in a position to assess their operational performance and force the failing facilities to do better. But again, as cultural facilities are built with a significant amount of local and central governments’ funding, their operation should have a certain level of efficiency. Therefore, the central government should develop a set of guidelines and criteria for performance evaluation and provide them to the facility operators for voluntary self-assessment. It is also recommended to think about how to incentivize voluntary performance evaluation (e.g. grant financial support to the local governments that carry out self-assessment).
Lastly, art centers and cultural facilities built through BTL projects are failing to play their primary role as a specialized cultural facility due to insufficient experts and budget for contents. As the performing art centers that are run by financially weak local governments tend to have insufficient budgets and experts to provide quality content, they just end up mimicking unpopular programs or rent out the facilities. In addition to support for construction itself, the central government should think about how to provide a financial support for content management of a BTL facility, considering the level of financial independence of the local government, how urbanized the region is and what are the characteristics of the region.
The first problem identified is the inadequate feasibility study. Local governments pushed ahead with the BTL projects only from a policy perspective, rather than assessing the business-wise feasibility, and failed to provide sufficient supporting data for the cost analysis. As a result, they ended up building cultural facilities that are larger than the cultural demand, which in turn led to poor performance. The Korean government should develop and provide a system for local governments to assess the economic feasibility of a project and determine whether it is eligible for private investment.
The second problem is the inefficiency in the repair and maintenance of facilities. As the parties responsible for the operation and the repair and maintenance are different, it is difficult to repair defects in a timely manner and make additions or modifications to the facilities. Because cultural buildings tend to be atypical, it is hard to define roles & responsibilities between the two parties. While they fight over R&R, timely service is sacrificed. To address this problem, it is necessary to have a system to invite experienced experts from the initial stage of a BTL project. It will save the project owners trials and errors and help minimize the problems that may arise once the cultural facility starts operating. It is also recommended to establish and operate a joint steering council between the two parties for a smooth resolution of the problems caused by the dual-management system and for the mutual understanding and cooperation in running the facility.
The third problem is a lack of performance monitoring and evaluation by the central government. As there is no content-wise support provided by the central government for local governments, the central government is not in a position to assess their operational performance and force the failing facilities to do better. But again, as cultural facilities are built with a significant amount of local and central governments’ funding, their operation should have a certain level of efficiency. Therefore, the central government should develop a set of guidelines and criteria for performance evaluation and provide them to the facility operators for voluntary self-assessment. It is also recommended to think about how to incentivize voluntary performance evaluation (e.g. grant financial support to the local governments that carry out self-assessment).
Lastly, art centers and cultural facilities built through BTL projects are failing to play their primary role as a specialized cultural facility due to insufficient experts and budget for contents. As the performing art centers that are run by financially weak local governments tend to have insufficient budgets and experts to provide quality content, they just end up mimicking unpopular programs or rent out the facilities. In addition to support for construction itself, the central government should think about how to provide a financial support for content management of a BTL facility, considering the level of financial independence of the local government, how urbanized the region is and what are the characteristics of the region.