NK declares disposal of S.Korean assets in Mount Kumgang

NK declares disposal of S.Korean assets in Mount Kumgang. August. 23, 2011 06:11. lightee@donga.com dawn@donga.com.

North Korea demanded Monday that South Korean staff leave the Mount Kumgang area within 72 hours, saying it will start the disposal of South Korean assets in the tourist resort.

Pyongyang had postponed the deadline for the disposal, putting pressure on the resumption of the tour and eventually giving Seoul an ultimatum. In response, South Korea said it will take legal and diplomatic actions, raising tension between two Koreas.

○ Inter-Korean project on brink of collapse

A spokesman for North Korean tourist authorities said Monday morning, “We consider that the South has completely given up the properties and all rights owned by South Korean companies and will start the effective legal disposal of all assets and properties, including real estate, equipment and vehicles.”

This implied that the North will sell or lease the frozen or confiscated assets and properties to another developer.

The spokesman also said the South should stop taking out goods and assets out of the resort area from midnight Sunday and for South Koreans on the site to leave within 72 hours. The North claimed that the action is in accordance with Articles 26 and 49 of its act on the Mount Kumgang district.

In addition, Pyongyang held Seoul responsible for its action, saying, “The South Korean conservative puppet regime is responsible for the current situation of the Kumgang tourism business.”

Pyongyang also sent the same message in a notice to the Unification Ministry in Seoul and Hyundai Asan Corp., the South Korean developer and operator of the resort. “Any lack of cooperation or destruction of any asset or property will be handled under the law,” the North said, implying the possibility of taking out or dismantling important equipment from the Mount Kumgang area.

○ Leaving 443 million dollars worth of assets behind

South Korean assets seized by the North are worth 484.1 billion won (447.2 million dollars). Of the amount, Hyundai Asan invested 226.9 billion won (209.6 million dollars), including hotels in the resort, and the South Korean government spent 124.2 billion won (114.7 million dollars) to build a meeting venue for Korean families separated during the Korean War, duty-free shops and a cultural hall.

Hyundai Asan’s three power generators with a capacity of 1,700 kilometers at Goseong dock are one of the major assets in the tourist region.

North Korea, however, is unlikely to attract foreign tourists to Mount Kumgang on its own or sell the facility to foreign investors. It continues to search for a new partner in China, Japan and the U.S.

Rumor also has it that that North Korean leader Kim Jong Il has ordered that the Mount Kumgang tour be made into a luxury business but low feasibility has prevented progress in the project.

Employees of Hyundai Asan and Emerson Pacific at the resort plan to return to the South before the deadline.

“We cannot accept North Korea’s action and it should withdraw its decision,” Hyundai Asan said after an emergency meeting chaired by CEO Chang Kyung-chak, adding, “We are discussing with the government procedures for the safe return of the staff in the North (14 South Koreans and 2 Korean Chinese).”