North Korea closed the door on a business plan involving the capital of an ancient Korean dynasty in its border town of Kaesong earlier this month despite a US$500-million contract with a South Korean firm to develop it as a tourist attraction for tourists, the Unification Ministry said Friday.
"In a letter dated June 22, the North's Asia Pacific Peace Committee said it would restrict South Korean visitors from visiting the city from July 1," Kim Chun-sig, director of the ministry's inter-Korean economic cooperation bureau, told reporters.
The new tourism project has yet to take off amid a feud between the North Korean committee and its South Korean business partner, Hyundai Asan, but hundreds, if not thousands, of South Koreans, mostly businesspeople and government officials, have been allowed to visit the ancient town during their excursions to a joint industrial complex just outside the city.
"The North has been taking this measure since July 1," Kim added.
The sudden shutdown apparently comes amid a prolonged dispute between the communist state and Hyundai Asan, the North Korea business arm of the Hyundai Group, according to the ministry official.
In October last year, the North Korean committee said it would not launch the new tourism program with Hyundai Asan, only two months after the sides signed a contract, giving full and exclusive rights to the South Korean firm to develop the new tourist attraction.
At the time, observers believed the North's sudden change of heart came as part of its protest against Hyundai Asan's new chairman Hyun Jeong-eun for sacking the company's former president Kim Yoon-kyu, who had worked with the North Korean committee since the day 1 of the cross-border partnership.
The observers, however, now believe the North is seeking to take a larger share of the pie rather than to prove its loyalty to an old friend.
Hyundai Asan had paid over $500 million to the North in advance in the first half of 2000 for exclusive rights to Kaesong tourism project and six other business deals, according to the ministry.
The communist state has named Lotte Tours Co. as its preferred South Korean business partner for the Kaesong tourism project.
Earlier reports said Pyongyang has asked the new South Korean partner, if it decides to join, to pay $150 to $200 for each tourist taking a one-day trip to Kaesong, nearly 20 times more than the $20 Hyundai Asan pays to North Korea for every South Korean taking a trip to its Mount Geumgang.
The ministry official said the government will not approve the demand for a change of partner unless the request is made by an agreement between the involved parties.
"The government has also clarified its position clearly to Lotte Tours Co.," Kim said.
Lotte Tours was initially reluctant to join in the possible contract dispute between the North and Hyundai Asan, saying it will not join the business project unless the original South Korean partner first withdraws voluntarily and the South Korean public approves its participation.
The company, however, filed a request with the Unification Ministry on July 5 to visit Kaesong for talks with the North Korean organization there, according to ministry officials.
It withdrew its request shortly after the communist state launched seven missiles earlier that day, the officials said.
Kim said the soured relations between Hyundai Asan and its North Korean business partner will not lead to a rupture in their program for tours to the North's mountain resort.
Over 1.2 million South Koreans have visited Mount Geumgang since the two launched the joint tourism project in the late 1990s.
Seoul, July 21 (Yonhap News)
N. Korea says it will not launch new business with Hyundai: ministry |
