North Korean Economy Watch

According to Yonhap:

South Korea will next week start repairing a road used by North Korean commuters to reach an inter-Korean industrial complex in the North, an official said Thursday amid signs of a thaw in bilateral relations.

The 4.5-kilometer road linking North Korea’s border city of Kaesong to the nearby industrial park is used by more than 47,000 North Korean workers who are employed by some 120 South Korean firms operating in the zone. South Korean officials earlier said the road was damaged in summer’s torrential rains, prompting the South to conduct an on-site survey.

“After signing an agreement (with the North), we expect to start repair work next week,” said an official at the Unification Ministry, which handles inter-Korean relations in the South.

“It will likely take about three months to complete the work, unless the weather becomes too cold, and cost us around 1.8 billion won (US$1.59 million),” the official said, speaking on condition of anonymity.

The repairs will involve restoring damaged paved sections and filling in holes on unpaved sections. Repairing the road is expected to save time for North Korean commuters and reduce traffic accidents.

The Daily NK offers some additonal information:

A government official explained today that the decision was made pursuant to agreement between the Kaesong Industrial Complex Management Committee, LH Construction and the North Korean authorities.

“The agreement has not yet been signed, but we are hoping to start the construction at the beginning of next week,” the official explained.

“Our side has taken on responsibility for planning the road repairs and supervising the construction,” he went on. “The weather could change things, but the construction should require three months and is expected to cost 1.8 billion South Korean won.”

Aside from the aforementioned construction, there are also plans to reconstruct two turning points for buses serving the complex. The human resources for the construction will be provided by North Korea.

There are plans to extend bus service to cover the areas of Pongchon (봉천), Kumchon (금천), and Phyongsan (평산). However, the roads to these areas are unpaved and extension of transportation services to these areas will require negotiations with the North Korean authorities.

Read the full story here:
Seoul to start repairing road leading to Kaesong complex next week
Yonhap
2011-11-3

Pictured above: (L) A low-resolution image of the Hyeasn-China bridge (Google Earth) (R) A ground level photo of the bridge.

According to the Daily NK:

Construction work on a bridge connecting Hyesan in Yangkang Province and Changbai in China’s Jilin Province is raising hackles in the corridors of Sino-North Korean economic cooperation.

According to a source in China, both China and North Korea recognize that the existing ‘Friendship Bridge’ spanning the Yalu River between the two cities cannot handle increasing trade volumes. In particular, increasing copper ore production from Hyesan Youth Mine (which has been developed with Chinese capital) is putting it under unsustainable strain.

However, while China wants North Korea to expand and reinforce the existing bridge, North Korea is apparently pushing for the construction of an entirely new bridge in a different location using Chinese capital.

North Korea’s reason is supposedly one of revolutionary history. According to the source, “Chosun is opposed to the expansion of the bridge because right next to the bridge on the Hyesan side there is a stone commemorating a visit by Kim Jong Il.”

The 5m x 2m granite stone in question was set in place to commemorate the time on June 5th, 1956 when Kim Jong Il and his Pyongyang No. 1 Senior Middle School comrades stopped there during a trip to Mt. Baekdu and looked around an old royal building.

However, money also appears to be an issue. “In particular,” according to the source, “they are stubbornly insisting that ‘if you need a bridge, you should bear the burden of its construction.’”

In any case, the limitations of the bridge in its current condition are perfectly clear. It only has one lane, meaning that transit in both directions is impossible, and, though only built in 1985, there are very real concerns that its concrete structure cannot handle the Chinese heavy vehicles transporting copper ore away from the mine.

One other problem for North Korea is that the bridge is connected to Hyesan Customs House; the road off the bridge passes through the middle of the blue-roofed customs house, while the second floor houses the customs office itself. Therefore, expansion of the bridge would also involve redesigning the customs house. Due to fast flowing waters to the east, the only direction in which it is possible to expand is to the west; however, that is exactly where the commemorative stone is. Not only that, it is also the location of the local Kim Il Sung Revolutionary History Museum and Kim Jong Suk Art Theater.

Therefore, the source said North Korea has put forward an area around 4km east of the existing Hyesan Customs House as a possible candidate location for a new bridge. However, the suggested area is relatively unfavorable in terms of river width and topography, which would drive up construction costs. Given that North Korea is demanding that China bear the weight of these costs, it seems unlikely that agreement will be reached under the current conditions.

In the words of the source, “Chosun is making totally nonsensical demands. No conclusion is likely for the time being.”

This is not the first time that bridges spanning the Sino-North Korean border have been a source of friction between the two countries. Following a similar spat in 2005, China simply completed reinforcement work on its own half of a bridge between Hoiryeong and Sanhe, leaving the other half in its original state.

Related material:
1.  A Chinese company has mad a substantial investment into the Hyesan Youth Mine.

2. China is building a new bridge to the DPRK just west of the bridge linking Dandong and Sinuiju.

Read the Daily NK story here:
A Troubled Bridge between Friends
Daily NK
By Kang Mi Jin
2011-11-1

Pictured above (Google Earth): The towns mentioned in the article below from which the Kaesong Industrial Zone could draw more labor: Pongchon (봉천), Kumchon (금천), and Phyongsan (평산).

Institute for Far Eastern Studies (IFES)
2011-10-20

According to South Korea’s Ministry of Unification (MOU), the “May 24 Sanctions” that went into effect after the sinking of the naval boat Cheonan was relaxed and began to permit the resumption of construction of businesses in the Kaesong Industrial Complex (KIC). In addition, plans to build fire stations and emergency medical facilities in the area are also currently underway.

After South Korean Grand National Party chairman Hong Jun-pyo visited KIC on September 30, 2011, the ROK government has reached the following decisions: 1) to allow the resumption of halted factory constructions; 2) to build a fire station and emergency medical facility; 3) to resume repair work for commuting roads for KIC employees; and 4) to extend the operations of commuter buses.

This means seven companies that received permits in the past to begin construction but stopped after the sanctions went into effect would be able to resume the halted construction projects.

According to the Ministry of Unification, the seven companies include three metal and machinery, three textile, and one electronic factories, taking up a total area of 103,527 square meters. The total site of production facilities of stage 1 businesses in the KIC reaches 2,171,900 square meters, in which the currently operating 123 companies take up 783,471 square meters. With the sanctions lifted, the total area of businesses in operation will reach 885,950 square meters.

In addition, five companies awaiting construction for expansion will have to wait a little longer. The authorities announced to discuss this issue at a later date, looking positively on their construction to resume shortly as well.

Also the MOU announced to push forward with the establishment of fire stations and emergency medical facilities, “to protect the properties and health of businesses and employees of the KIC. The plans to break ground for fire station will begin in mid-November and is expected to be completed by late next year.”

The layout for the KIC fire station was completed in December 2009 and 3.3 billion USD has been budgeted to fund the construction. The station will be constructed on a steel frame on a 3,305 square-meter lot with the total floor space to be around 2,182 square meters.

The Kaesong Management Committee has been operating a “fire/police station” from April 2005. But with occurrences of accidental fires since last winter, it has reinforced the number of fire engines and manpower – currently at a total of eight fire trucks and 36 fire fighters.

Medical facilities in the KIC will also be completed by the end of 2012 once the construction begins early next year. About 3 billion USD is set for this project.

Currently at the KIC, Green Doctor’s Cooperation Hospital is in charge of providing medical and health services in the KIC, with South Korea Green Doctor’s Kaesong Hospital treating the South Korean employees and North Korean Comprehensive Clinic treating the North Korean employees exclusively. The South Korea Green Doctor’s Kaesong Hospital is currently operated by volunteers at a clinic level. The hospital was in the process of improving the facilities to more than ten beds. However, this project was halted after the May 24 sanctions went in effect.

On another note, the MOU also announced that maintenance work for the road connecting Kaesong City to the KIC would begin. The road is normally used by North Korean employees of the KIC. It was also announced that the number and operation of commuter buses would increase to help with the commute. The buses operate in the 20 km radius; the plan is to increase that to 40 km. Since September 2010, the number of buses increased to 400.

There are plans to extend the service to cover the areas of Kumchon, Bongchon, and Pyongsang. However, the roads to these areas are unpaved and extension of transportation services to these areas will require negotiations with the North Korean authorities.

Although these measures will alleviate some of the problems faced by the businesses in the KIC, the MOU still stands firm on its position that North Korea must take responsibility and make formal apology for the Cheonan incident in order for a fundamental resolution of the situation to occur.

Pictured above: An American-made, petrol-guzzling Hummer H2 (MSRP 2008-$53,286; 10 mpg_-US;24 L/100 km; 12 mpg_-imp) in the parking lot of (I believe) the Yanggakdo Hotel in Pyongyang in September 2010.  The photo comes from here.

UPDATE 2 (2011-10-5): Accoridng to the Mainichi Daily News:

A man standing trial for illegally exporting luxury foreign cars to North Korea was a spy attempting to acquire foreign currency under the guise of a businessman, police allege.

An Sonki, 71, a North Korean resident of Japan, is being tried at the Tokyo District Court on charges of violating the Foreign Exchange Law for exporting three foreign luxury cars to North Korea in 2008.

An traveled to North Korea and China on 40 occasions over the past five years. He is believed to have worked as a broker between North Korea’s state-run companies and foreign firms, while ostensibly working for an electricity-affiliated company in Tokyo almost every day. He managed his own trading company, whose nominal president was a South Korean resident of Japan whom he was acquainted with.

The Metropolitan Police Department (MPD)’s Public Security Bureau had kept track of An since the 1990s because An invited North Korean trade missions to Japan and visited the North Korean passenger-cargo ship Mangyongbong while it was docked at a port in Japan.

The MPD launched a criminal investigation into the illegal export case in June and found that An belonged to a spy agency under the Korean Workers’ Party. An reportedly received instructions from the secretive agency by calling it about once a week from a public telephone.

The MPD also confiscated dozens of contracts and planning documents from locations linked to An. The documents pertained to joint crab and shrimp fishing with Russian companies; the processing and selling of kimchi with Vietnamese companies; scrapping and repairing of ships with Japanese and Chinese companies; cable copper trading with Zambian companies; and importing matsutake mushrooms and snow crabs to Japan.

An’s activities were apparently aimed at brokering joint ventures between North Korean state-run companies and foreign companies, as well as bringing supplies to North Korea. Investigators suspect that An was helping with North Korea’s acquisition of foreign currency and the improvement of power supply in the North.

An was reportedly living a frugal life, renting a six-tatami mat apartment room without a bathroom for 40,000 yen a month. The apartment was not equipped with an air conditioner or television. There was hardly any living ware in the apartment, except for a rice cooker and a compact refrigerator. His lunch box he brought to his company contained only rice and pickled vegetables. He always wore a suit, which was left by a deceased acquaintance. He rarely contacted his separated wife and child.

“I never thought of my own interests but acted in accordance with the agency’s instructions,” An was quoted as telling investigators.

An has not revealed much about the flow of his money. Investigators confiscated 1 million yen in cash and wads of receipts from traveling abroad, but the origin of those funds is unknown.

“His activities are shrouded in mystery. We suspect that the importance of secret agents like him has been increasing in North Korea, which is under economic sanctions,” said a senior MPD official.

During the first hearing of the trial on Sept. 9, An demanded that all charges in the indictments be withheld. How much of his secret activities will be revealed depends on the questioning of the defendant during the ongoing trial.

UPDATE 1 (2011-7-7): According to the Mainichi Daily News:

A North Korean man under arrest for illegally exporting luxury foreign cars to Pyongyang by way of South Korea allegedly disguised the cars as destined for foreign embassies, it has been learned.

An Sonki, 71, a North Korean resident of Tokyo’s Bunkyo Ward, was earlier arrested by the Metropolitan Police Department (MPD) on charges of violating the Foreign Exchange Law for exporting luxury foreign cars to North Korea from Kobe in 2008 under the instruction of the Workers’ Party of Korea’s undercover agency.

According to the latest revelations, the North’s undercover agency instructed An to make the Indian Embassy in Pyongyang one of the final destinations of the exported cars apparently to prevent South Korean authorities from uncovering irregularities when the cars went through the South. The MPD is trying to work out all the facts of the case.

An is suspected to have exported three fancy foreign cars to Pyongyang on two separate occasions in 2008, ferrying the cars from Kobe Port. The export was undertaken by a Tokyo-based trading company called “Godo Holdings,” which is effectively managed by An. The MPD suspects that An is a North Korean agent.

According to the MPD’s Public Security Bureau, An had declared to Japanese customs that the consignee of the luxury cars was a delivery company in Seoul. However, the vehicles were ultimately shipped to North Korea by way of the South, where the items were re-registered as transit cargo. It is believed that the cars were declared as destined for the embassies when they cleared South Korean customs.

Investigators have confiscated from An’s home documents that described a plan to make the Indian Embassy and a Middle Eastern embassy in Pyongyang the final destinations of the cars.

“I was told to make the embassies the nominal destinations of the cars,” An was quoted as telling investigators.

Investigators have also confiscated a North Korean passport, a seal with the name of the undercover agency engraved, as well as a document describing a plan to establish routes to distribute the North’s agricultural and marine products to Japan, the United States and Europe. It has also emerged that An had traveled to South Africa in order to procure rare metals, according to investigators.

An reportedly belonged to a section of the North’s undercover agency that was in charge of Japan.

More on the interesting business dealings of the North Korean embassy in India below.

ORIGINAL POST (2011-6-21): According to KBS:

Japanese police have arrested a North Korean citizen on charges of selling luxury foreign cars to the North through South Korea.

Japanese media said that the North Korean man, who resides in Tokyo and was identified only by his surname “Ahn,” is charged with violating Japan’s foreign currency law.

Ahn is accused of illegally exporting three used Mercedes-Benz cars to North Korea without the Japanese government’s permission. The cars were shipped to the communist country from Japan’s Kobe port via South Korea’s Busan and Incheon between September and December 2008.

This is the first uncovered illegal export scheme to use South Korea as a stopover between Japan and North Korea. China is generally the popular channel for illegal exports between the two nations.

Japanese police also believe that Ahn is a North Korean spy.

Back in May, the DPRK detained two Japanese men for drug smuggling in Rason, and North Korean Embassy officials in India came under investigation for involvement in a luxury car smuggling case worth W100 billion (US$1=W1,091).

Read the full story here:
Japan Arrests N. Korean on Charges of Illegal Export
KBS
2011-6-21

Institute for Far Eastern Studies (IFES)
2011-9-14

At the seventh China Jilin and Northeast Asia Investment and Trade Expo (NEASIAEXPO), the North Korean delegation actively promoted the Rajin-Sonbong (Rajin) Economic and Trade Zone to attract investment.

During the expo, the DPRK’s Ministry of Trade and China’s Ministry of Commerce and People’s Government of Jilin Province co-sponsored the “(North) Korean Business Day and China-DPRK Trade and Investment Session” at the Changchun International Conference and Exhibition Center on September 7. Hwang Chol-nam, the vice mayor of Rason City, briefed the attendees on the current situation, advantages, and special benefits of his city.

According to Hwang, “The spacious 470 square-kilometer Rason Economic and Trade Zone is one of the largest economic trade zones,” and advertised the geographic and economic advantages of Rason as the “transportation hub of Northeast Asia that connects China and Russia via Tumen River and with Japan across the East Sea.”

He also introduced the three ports in the region. “Rajin Port is equipped with the annual loading capacity of 3 million ton and Sonbong Harbor is able to transport 2 to 3 million ton of oil while Ungsang Harbor is able to handle up to 600,000 cubic-meter of lumber annually.” He also boasted the ports to be deep enough where it does not freeze during the winter.

Rason was also introduced to have received the “special city” designation in 2010 and will grow to have a population of one million. The recently amended “Law on the Rason Economic and Trade Zone” was revised and supplement with over 50 articles.

Hwang also elaborated on the eight preferential policies providing special tax benefits to foreign investors. He asserted, “The government of North Korea will guarantee the investment of the foreign investors by not nationalizing or demanding requisitions. For inevitable cases where such demands occur, proper compensation will be provided.”

The income tax is also at 14 percent, which is 11 percent lower than other areas in North Korea. For companies with business plans over ten years, foreign capital companies will receive three years of tax-free benefit starting from the profit earning year and two years thereon after will receive 50 percent tax-free benefits. According to Hwang, over 100 foreign companies and offices are operating businesses currently in the special economic zone.

He also announced that the current highway construction project connecting Rajin with Wonjung is expected to be completed in October, and that the Tumen-Rajin port railway system is to be upgraded to a broad gauge railway next month.

Specifically, Russian Railways reached an agreement with North Korea to repair the Hasan-Rajin Railway and improve the Rajin port facilities, especially focusing on Pier 3. The plans include upgrading Rajin as a container harbor to be capable of transporting twenty-foot equivalent units annually. Russia and the DPRK have already conducted measurement and geological surveys and reached the process design phase.

However, Seo Gil-bok, the DPRK’s vice minister of commerce, stated in a speech that North Korea would “actively work hard to make the Rason region a successful collaboration between the DPRK and China,” saying further that they would “pull out all the stops to realize the goals agreed by the best leaders from both nations.”

Many foreign media and correspondents were present at the event to cover the “Korean Business Day.” At the event, North Korea actively promoted the Rason Economic and Trade Zone by also presenting a promotional video of the zone.

38 North
Andray Abrahamian
2011-8-29

A bus bumps and bruises its way along the unpaved road, carrying would-be investors to Rason’s First Rason International Trade Exhibition which ran from August 21-25, 2011, in Sonbong. The windows are open, until a crimson humvee barrels past, its powerful suspension dancing on the road, leaving behind a plume of beige dust. The bus windows snap shut, the still air quickly gets hot and more than one of the passengers wishes we were Chinese high-rollers, being whisked to the Emperor Casino and Hotel, which sits beautifully on Korea’s East Sea, overlooking Bipa Island and flanked by lush green mountains and crystal waters.

The passengers of the humvee-part of the casino’s fleet-will long be checked in and gambling their fortunes away by the time we complete our two and a half hour journey. However, it won’t always be this way. Rason’s 50km road to the border is finally being upgraded. Indeed, the 2.5 hour journey took 3.5 hours in June. Since then, the road has been widened, the first stage of the construction plan, allowing for traffic to flow both directions more easily and smaller passenger vehicles to overtake the more cumbersome truckers who ply the road.

Its construction is an important sign in the development of the Rason Special Economic Zone. Rason, an amalgamation of the names of the area’s two biggest cities, Rajin and Sonbong, could theoretically be a vibrant hub for both logistics and manufacturing. It is located in the far Northeast of the Democratic People’s Republic of Korea, bordering Russia and China. It has abundant, cheap labor and the region’s northernmost ice-free port. It has been a legal entity since the early 1991, but has struggled to reach its potential in the face of ambivalence from Pyongyang and difficult geopolitical circumstances.

Local administrators have bold plans for this experiment in economic opening-up and to develop as the Rason Municipal People’s Committee has imagined, an efficient road link with China’s Northeastern provinces is vital. For about a decade, improvements to the road have been “under discussion” and “coming soon,” but it is now undeniably underway. Work began in May of this year…READ MORE HERE

The Choson Ilbo posts a video of dozens of military vehicles being shipped to the DPRK:

Left: Click image above to see video. Right: Dandong Customs House

According to the article:

Some 3,000 to 4,000 Chinese-made military trucks and jeeps entered North Korea last month, it was confirmed Monday. According to video clips obtained by the Chosun Ilbo, over 100 military trucks and jeeps made in China went to North Korea everyday last month after going through customs in Dandong.

There were eight video clips of varying lengths ranging from two minutes to 16 minutes. The footage shows Chinese-produced military vehicles standing in the 10,000 sq.m parking lot of the Dandong customs office waiting to be cleared along with other civilian cars, and two-story trailers loaded with military vehicles waiting on the side road to enter the customs office. A local source in Dandong said, “Normally, all Chinese-made vehicles going into North Korea were civilian, but in July, a massive number of military cars went to North Korea.”

A senior source in North Korea said that these cars were gifts to military officers by North Korea’s heir apparent Kim Jong-un in celebration of “Victory Day,” or the day the armistice in the Korean War was signed on July 27. “North Korean military vehicles produced in the 1970s and the 80s are too old to carry out drills, and many soldiers were dissatisfied. In order to buy the loyalty of the military and show what he can do, Kim Jong-un replaced the old vehicles thanks to the assistance of China,” the source added.

Jeeps were given to officers to be used to conduct operations, and the trucks were given to soldiers.

Analysis of the footage suggests the trucks were 6-ton trucks made by FAW Car Limited Company. North Korean leader Kim Jong-il visited the headquarters of this firm in Changchun, Jilin, during his visit to China in May. The military jeeps were manufactured by Beijing Automobile Works with engine capacity of 2,200 cc and 100 horsepower. BAW, which specializes in SUVs, trucks and military vehicles, is a subsidiary of Beijing Automotive Group, a partner of Hyundai Motor.

Dump trucks, large buses, sedans, oil trucks, agricultural machines and heavy machinery were also spotted in the video going into North Korea. In the windscreen, the name of the recipients is written. One is Korea Taesong Trading Company, a trading company under the Workers Party that manages Kim Jong-il’s slush funds. It was blacklisted by the U.S. as part of its economic sanctions against the North.

In one video clip, tourist buses pack one side of the parking lot. Another clip shows a queue of several dozens of LNG trucks. A South Korean government official commented, “North Korea depends on China for almost entire amount of fossil fuel it needs.”

Pictured above (Google Earth): The Musan Mine, the DPRK’s largest.  See in Google Maps here.

According to the JoongAng Daily:

During his surprise May visit to China, North Korean leader Kim Jong-il secured free fertilizer and discounted food to help alleviate the impoverished country’s chronic food shortages.

A source in Beijing who monitors North Korea-China relations told the JoongAng Ilbo on Monday that Chinese officials agreed to provide 200,000 tons of fertilizer free of charge as well as 500,000 tons of corn at a discount in exchange for rights to North Korea’s abundant natural resources.

“When 200,000 tons of fertilizer is planted on North Korean soil, it can bring about a three-fold increase in the harvest,” the source said. “This can be the equivalent of giving 600,000 tons of food.”

The source added that China agreed to sell the 500,000 tons of corn for half of the international rate, which would be $30 per ton.

The corn, the source said, had already crossed the border into North Korea from northeastern China.

In exchange, Kim will allow China access to his country’s natural resources.

“The two parties agreed to participate in the extraction of buried rare earth minerals in Musan in Hamgyong Province,” the source said. “It’s quite a profit for China as it is thirsty for materials.”

North Korea is estimated to have around 20 million tons of rare earth minerals, which are vital in the production of high-tech goods.

The Beijing-based source said the agreement gives China the responsibility for the cost of building roads to transport the natural resources as well as lending equipment.

In exchange, North Korea will hand over 50 percent of the extracted rare earth minerals free of charge to China, with the rest to be sold to China at international market rates.

Meanwhile, other sources said that Kim also received a health checkup during his stay in China.

“When Kim Jong-il was visiting Yangzhou, he received a special examination from an oriental medicine doctor that the highest Chinese elite have gone to over the years,” a source familiar with North Korean issues said

The source added: “Kim Jong-il has never trusted China’s Western medicine. I heard from a Chinese official that Kim received an oriental medicine diagnosis by taking his pulse and that it did not involve drawing blood.”

Additional Information:

1. Here is a post linking to all the major DPRK food stories this year.

2. The media has reported on other DPRK food barter deals with Cambodia and Myanmar.

3. The role of the Musan Mine in DPRK-PRC relations has been quite interesting.  Here are previous posts on the mine.

Read the full story here:
North got fertilizer on Kim’s trip to China
JoongAng Daily
Chang Se-jeong
2011-8-19

Pictured above (Google Earth): A bus depot in Rakrang-guyok, Pyongyang.  See in Google Maps here.

According to the Daily NK:

Growth and improvement is evident in some areas of the private sector in North Korea, Ishimaru Jiro of ASIAPRESS revealed on the 16th, pointing to the growth of bigger, better private transit concerns and relatively productive coal mining operations as evidence of this trend.

In the past, trains were almost the only viable means of long-distance transportation in North Korea. Then, as private business began to grow and the railways fell into a deep malaise, vehicles such as trucks and cars belonging to military bases, state security and state enterprises were pushed into service to earn money for moving people; this, the so-called ‘servi-cha’ industry.

The servi-cha industry has long been fragmented and small scale; but now transportation companies run by rich individuals (‘donju’) which purchase several buses and hire drivers, guides and mechanics, are acting just as a transit company in a capitalist state would do.

With profit-sharing and bribery as the backbone, a large number of North Korean organs and enterprises have decided to lend their name to these individuals, fuelling the growth and development of a network of sorts.

“From the early 2000s, a high-speed bus network mostly between major cities began to emerge,” Ishimaru, revealing the latest research by ASIAPRESS internal North Korean sources, commented. “The companies are packaged as an enterprise affiliated to some state authority outwardly, but they are actually operated by individuals who pay kickbacks to that authority.”

The People’s Safety Ministry affiliated 116 Task Force Team is one such transportation company, Ishimaru says. It operates buses connecting Shinuiju, South Pyongan Province and Pyongyang. Ordinarily, the bus parks at a station or major public location, and then departs when it is full of passengers going to the next destination.

Here are previous posts on the servi-cha industry.

Read the full sotry here:
Green Shoots of Private Enterprise Growth
Daily NK
2011-8-17

Pictured above (Google Earth): The approximate route of the new Kowon-Hamhung highway

Here are the KCNA stories on the new highway in chronological order:

Pavement Project of Kowon-Hamhung Highway Finished

Pyongyang, May 26 (KCNA) — The pavement project of the Kowon-Hamhung highway in South Hamgyong Province was finished recently. The highway began to be reconstructed on an expansion basis in mid-March.

Some 600,000 cubic meters of earth were cut or filled on the ground, over 250,000 cubic meters of sand and gravel tamped and nearly 700,000 square meters of road paved with concrete.

Trees have been planted and flowerbeds made on both sides of the highway. Slopes are being swarded and accident-preventing stones and waymarks installed.

Revetment, conduit and culvert projects will be completed soon.

The reconstructed highway will help facilitate transportation in the area and promote the country’s economic growth.

Highway between Kowon and Hamhung Reconstructed

Pyongyang, May 31 (KCNA) — The highway between Kowon and Hamhung was successfully rebuilt.

The completion of this project helps to satisfactorily ensure the cargo transport for various domains of national economy, provide people with good conditions for travel and radically improve the environment in this area.

Builders finished the projects for paving the highway and building many structures, etc. in a matter of 60 odd days.

More than 40,000 trees of good species were planted and an area covering hundreds of thousands of square meters was put in turf, turning the landscape of the highway beautiful.

New Motorway Opened to Traffic in DPRK

Pyongyang, June 17 (KCNA) — A project for rebuilding Kowon-Hamhung motorway on an expansion basis has been completed in the DPRK.

During the project, the army and the people carried out concrete pavement and building of scores of bridges and retaining walls in single-minded unity.

The completion of project made it possible to contribute to the economic development of the country and renewed the looks of the land to meet the requirement of the Songun era.

A ceremony of opening the road to traffic took place on Friday. Present there were Premier Choe Yong Rim, Minister of the

People’s Armed Forces Kim Yong Chun, Chief Secretary of the South Hamgyong Provincial Committee of the Workers’ Party of Korea Kwak Pom Gi, officials of relevant organs, servicepersons, officials and builders of South Hamgyong Province, working people and helpers.

Conveyed at the ceremony was a message of thanks of the WPK Central Military Commission addressed to soldier-builders and inhabitants and helpers of South Hamgyong Province who performed labor feats in the project.

There were a report and speeches there.

The highway from Hamhung to Kowon, however, is only half of the distance needed to connect Hamhung to the Pyongyang-Wonsan paved highway.  I am unsure if the remainder of this route has already been completed or if it remains to be done as a separate project.

The distance of road that was paved is approximately 60km.