North Korean Economy Watch

Chosun Ilbo (h/t Tim Beal)
9/19/2007

The government is seeking to incorporate the cost of electricity supply for the Kaesong Industrial Complex in North Korea into South Korea’s own electricity fee system. Combining the two would allow losses from the Kaesong complex worth several billions of won a year since 2005 to be absorbed by the overall scheme. But that would mean the South Korean public has to shoulder the cost.

Grand National Party lawmaker Eom Ho-sung on Tuesday released official documents exchanged between the Unification Ministry and power monopoly KEPCO. “According to a feasibility study by Deloitte HanaAnjin accounting firm commissioned by KEPCO, electricity transmission to Kaesong costs the South an annual W19.3 billion (US$1=W930) and an estimated total of W966.8 billion by 2054,” he said. It cost the South W5.8 billion in the 2005/2006 fiscal year.

Electricity used at Kaesong is rated as industrial-use costing W4,190-5,520 per kilowatt, cheaper than for South Korean homes, so a loss is inevitable. According to the documents released Tuesday, the ministry told related departments in June to review a way to compensate for the fee loss at Kaesong, by using the Inter-Korean Cooperation Fund to fill in for the past loss and combining the Kaesong fees with the domestic electricity bills in the future.

This entry was posted on Wednesday, September 19th, 2007 at 5:27 pm and is filed under Economic reform, Electricity, Energy, Kaesong industrial park, Special administrative regions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.