▲ This undated file photo shows the flag of South Korea (L) and its government. (Yonhap)

By Kang Yoon-seung

SEOUL, Sept. 3 (Yonhap) -- The government said Thursday it will carry out a major restructuring of state-run firms, including mergers among energy suppliers, with the plan eventually reducing the number of state-run institutions by 109 while guaranteeing job security for existing workers.

The government unveiled the DIET initiative for state-run firms, aimed at responding to industrial transformation driven by artificial intelligence (AI) and demographic changes. DIET stands for dynamic game changers, integrated entities, efficient players and a transparent system.

Under the plan, the country will merge and restructure five state-run power generators -- Korea South-East Power Co., Korea Midland Power Co., Korea Western Power Co., Korea Southern Power Co. and Korea East-West Power Co. -- into a single entity.

The government also plans to merge the Busan Port Authority, Incheon Port Authority, Ulsan Port Authority and Yeosu Gwangyang Port Authority into a single entity with four regional branches that will continue carrying out their existing roles.

The government will additionally consolidate the Korea National Oil Corp. and Korea Gas Corp. into a single company.

In contrast, the Korea Land & Housing Corp. will be split into two organizations, one responsible for land development and housing construction and the other for housing welfare.

"The separation is aimed at addressing inefficiencies caused by having a single organization simultaneously perform development functions, which prioritize speedy project implementation, and housing welfare functions, which emphasize the public interest," the government said.

The overall blueprint will eventually reduce the number of state-run institutions by 109 by consolidating organizations that perform similar roles.

"We plan to guarantee workers' job security and ensure their wages and benefits do not deteriorate following the mergers," the government said. "We will also proactively prepare various support measures, including enhanced welfare programs and performance-based incentives."

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