The amount of debt owed by public companies as of last year approached almost 400 trillion won, leading to concerns that the nation’s fiscal soundness may be at risk.

The combined debts to be paid by the 28 state-owned firms as of December last year were 393 billion won ($350 billion), up 8.7 percent from the previous year, an online news provider reported Sunday.

The figure also took a large part of the government’s total debt, which was some 445 trillion won.

The corresponding public firms include the Korea Land and Housing Corporation, Korea Electric Power Corporation, Korea Gas Corporation, Korea Expressway Corporation, KORAIL and others.

The land and housing developer LH had the largest amount of debt, totaling 138 trillion won, and electricity distributor KEPCO and Korea Gas followed with 95 trillion won and 32 trillion won, respectively.

The growing level of debts is largely attributable to the public companies’ involvement in large-scale construction projects, especially those initiated by the former Lee Myung-bak administration, analysts said.

The Korea Water Resources Corporation, which holds some 13.7 trillion won in debts, was involved in the four-river restoration project, one of the representative infrastructure projects of the former government.

Also, the central government is responsible for freezing the public utility charges and shifting the burden to the related public organizations, observers noted.

Some warned that the situation may damage the nation’s credit rating, and others suggested privatization as a solution.

The Ministry of Strategy and Finance, however, denied the reported figures, claiming that several numbers were aggregated repeatedly.

“We will deliver an official report on the public companies’ debt level within the month,” said an official.

By Bae Hyun-jung (tellme@heraldcorp.com)