KEDO demands $1.9b from N. Korea for defunct reactor project


An international energy consortium has asked impoverished North Korea for nearly US$1.9 billion in compensation for its defunct project to build two nuclear power plants in the North under the 1994 nuclear agreement on the North’s freezing of its nuclear activities, diplomatic sources here said Tuesday.

North Korea, however, has yet to respond to the claim, the sources said, speaking on condition of anonymity. Analysts also said the North is unlikely to respond favorably, given its past record and current claims.

The North claims the 1994 agreement, known as the Agreed Framework, was breached by the United States long before it withdrew from the nuclear Non-Proliferation Treaty in early 2003, and is demanding compensation for the unfinished reactors.

“Now that the construction of the light-water reactors came to a final stop, the DPRK is compelled to blame the U.S. for having overturned the Agreed Framework and demand it compensate (the North) for the political and economic losses it has caused to the former,” an unidentified spokesman for the North’s Foreign Ministry said in a statement carried by the country’s Korean Central News Agency Nov. 28, 2005. DPRK is short for the Democratic People’s Republic of Korea, the North’s official name.

The diplomatic sources said the Korean Peninsula Energy Development Organization (KEDO) has asked for the amount in at least three letters sent to Pyongyang.

“(KEDO) has sent a letter (to North Korea) following every meeting of its executive board of directors since (last) May, demanding compensation for its assets at the construction site” in North Korea, one of the sources said.

“Letters were sent on five occasions, but the organization stated the specific amount in the three sent after September,” the source added.

The $4.6-billion project was officially scrapped early last year after years of suspension following the outbreak of an ongoing dispute over North Korea’s nuclear weapons program in late 2002. The communist state conducted its first nuclear weapons test on Oct. 9, 2006.

The sources said the amount includes expenses for KEDO’s executive office in New York.

A total of $1.56 billion had been spent on the nuclear reactor project before its official termination, of which, some $1.14 billion was shouldered by South Korea and $410 million by Japan. The European Union also pitched in $18 million for the joint project, which also includes the United States.

The countries blame the North for scrapping the project, which was part of a 1994 agreement between Washington and Pyongyang to settle a dispute over North Korea’s nuclear weapons program.

North Korea has attended international negotiations aimed at bringing a peaceful end to the dispute over its nuclear weapons program since its eruption in 2002, but no progress has been made since a 2005 round, during which the communist nation agreed in general to give up its nuclear ambitions in return for economic and diplomatic benefits.


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