North Korea considers suggesting joint use of Najin port

Reportedly, the Park Geun-hye administration is positively reviewing a plan of making investments in North Korea via Russia as a key measure to realize its "Eurasia Initiative." It is said that logistics cooperation using the newly-built 54km railroad between Hassan of Russia and Najin of North Korea will play a vital role in the plan.

According to government officials and experts, precedent to Russian President Vladimir Putin’s visit next month, the South Korean government is intensively reviewing the Eurasia Initiative that includes the so-called ‘Silk Road Express (SRX)’ traversing the continent from South Korea and North Korea to Russia to Europe and looking for concrete cooperative measures between Korea and Russia. To connect the severed North Korean section, which is key to this continental route but remains a barrier due to strained inter-Korean relations, the South Korean government seeks logistics business via the Najin-Hassan railroad and Najin port in North Korea.

Russia has already secured the right of using the Najin-Hassan railroad, which was launched in September this year, and the nearby pier no. 3 of Najin port and been proceeding with the construction and renovation of freight terminals there. Thus, a scenario, in which South Korea participates in shipping natural resources transported to Najin port from Russia to Busan Port or foreign countries, is likely. A large company identified with its initial “P” and currently running coal business in Mongolia is reported to be interested in this.

The primary obstacle to this project is the ‘May 24 sanctions,’ the South Korean government’s comprehensive sanctions against North Korea. Under these sanctions, South Korea cannot make substantial investments in North Korea. Nevertheless, a government official said, “The sanctions can be averted through “reverse investment”, in which Korea invests in Russia and then Russia invests in North Korea based on it.” He also added that investments can be made through local corporations of Korean firms in Russia.

The South Korean government has concluded connecting gas pipes from South Korea to Russia via North Korea, which had been discussed for some time, is unrealistic and highly risky. Negotiations on pricing between Russia and South Korea have stalled, let alone the discussion with North Korea. As a result, the South Korean government has turned its eyes to the railroad option. One government official said, “Korea’s increasing investment in Russia (including the Najin port project) can contribute to not just improving Korea’s relations with Russia but also engaging North Korea in a long-term perspective.”