Yonhap
12/14/2006
KEDO closes final deal on liquidation of N. Korean nuclear reactor project
An international energy consortium this week signed its final agreement with a South Korean firm to liquidate its 10-year project to build two light-water reactors in communist North Korea, a South Korean official said Thursday.
“In a Dec. 8 meeting in New York, the executive board of the Korean Peninsula Energy Development Organization (KEDO) approved a deal with the Korea Electric Power Corporation (KEPCO),” Moon Dae-keun, an official from the Unification Ministry, told reporters.
The so-called Termination Agreement made official the tentative agreement between the two sides in June that the South Korean electric company would pay the cost of liquidating the US$4.6-billion project in return for all of KEDO’s tangible assets outside of the communist North, Moon said.
The agreement comes as probably the last official document to be signed by the international consortium, which includes South Korea, Japan, the European Union and the United States, ministry officials said.
About $1.65 billion has been spent on the now-defunct project, more than $1.14 billion of which came from South Korea, according to Moon.
The government earlier estimated the liquidation to cost between $150 million to $200 million, but officials said Thursday that it would take as long as three years to accurately determine how much it would cost.
A group of KEDO’s subcontractors have filed claims for 37 lost contracts, worth some $73 million, as of Tuesday, the officials said, speaking on condition of anonymity.
The international organization has a total of 101 outstanding contracts, according to Moon.
The organization’s assets to be taken over by the South Korean electric company cost some $830 million to acquire or build, according to the Unification Ministry. No estimates for their current value were available.
The light-water reactors were part of a 1994 agreement between the United States and North Korea, in which the communist state agreed to freeze its nuclear activities in return for various economic incentives.
The 1994 agreement, known as the Agreed Framework, became a dead letter following North Korea’s withdrawal from the nuclear Non-Proliferation Treaty in early 2003 and its subsequent unloading of spent fuel rods from a nuclear facility for reprocessing.
North Korea is believed to have created as much as 40 kilograms of weapons-grade plutonium through reprocessing, enough to make six to eight atomic bombs.
