Archive for the ‘Mt. Kumgang Tourist Special Zone’ Category

DPRK bringing domestic and Chinese tourists to Kumgang

Wednesday, August 24th, 2011

Pictured above: North Korean visitors to Kumgangsan wave to the camera in this video posted to Uriminzokkiri’s YouTube page.  The Video is dated 2011-8-20.

According to the Donga Ilbo:

North Korea has reportedly opened the Mount Kumgang resort to its nationals since April after having allowed only a select few to visit the scenic area before with permission.

Pyongyang apparently intends to pressure Seoul by opening the door to the mountain to the North Korean people after failing to attract foreign investment and tourists to the resort.

A Chinese source on North Korea said Tuesday, “North Korea effectively allowed all North Koreans from April to visit the entire Mount Kumgang area, including major rivers in the region.”

North Korea, however, allows only group tourists and not individual visits. North Korean authorities have ordered companies and businesses to visit the site for company picnics or events, and the mountain has 4,000 to 5,000 visitors per month.

A business unit that wants to visit files an application with the provincial government, which then reports to the international tourist authorities of Mount Kumgang. After screening candidates, authorities issue a tourist certificate that allows holders to pass checkpoints on the way to the mountain.

Two days are generally needed to travel the region, and visitors use the accommodation facility called Kumgangsan that can handle 500 people per day. The source said rooms are in short supply because of many visitors.

Each visitor should cover his or her own expenses. The estimated cost is around 1,700 North Korean won (1.43 U.S. dollars) for entry and 19 cents per night, so the combined expense amount is 2,500 to 3,000 North Korean won (2.10 to 2.53 dollars).

The source said, “The expenses almost equal a month`s salary but the popularity (of going to Mount Kumgang) has surprised everyone.”

Speculation is rising over whether the North will use South Korean real estate and equipment belonging to Hyundai Asan Corp., the South Korean operator of the tour, and others. Pyongyang announced Monday that it will dispose of South Korean assets and properties in the resort area.

“North Korea has not yet used any South Korean facilities but has apparently used them for local tourists,” the source said.

Also, according to KCNA, at least one Chinese tour group has visited the resort since July 30:

Pyongyang, July 30 (KCNA) — A Chinese tourist group led by Zhuang Jun, general manager of the Chinese Kanghui Xi’an International Tourist Agency, visited the Tower of the Juche Idea, Party Founding Memorial Tower, Pyongyang Students and Children’s Palace and Mangyongdae, President Kim Il Sung’s native place, in Pyongyang on Friday and Saturday.

The tourist group came to Pyongyang by the Pyongyang-Xi’an international air service.

Yang Rui, manager of the agency, told KCNA:

I was pleased to see an excellent performance of Korean schoolchildren. I hope they will perform in Xi’an. I have long looked forward to visiting Mt. Kumgang. In the afternoon we are leaving for the mountain. I will be happy to enjoy the beautiful scenery of the mountain.

Read about the continuing troubles at Kumgang from the shooting to the present day here.

Read the full story here:
N.Korea allowed its people to visit Mount Kumgang from April
Donga Ilbo


DPRK orders expulsion of South Koreans from Kumgang

Monday, August 22nd, 2011

According to the New York Times:

North Korea on Monday gave South Korean tourism officials 72 hours to leave a mountain resort, saying it would start auctioning off South Korean-owned hotels, restaurants and other remnants of what used to be a symbol of inter-Korean cooperation.

North Korea gave the ultimatum on Monday after talks failed to resolve a dispute over whether tourism in the resort should resume and under what conditions.

“We consider that the South has completely given up all rights on properties owned by South Korean companies and now start legal disposal of them,” the North’s official Korean Central News Agency quoted the North Korean tourism authorities as saying. “All assets owned by South Korean companies in the Geumgangsan resort are banned from being taken out as of Aug. 21.”

The South Korean assets in the resort amount to 480 billion won, or $443 million, according to government data. North Korea said last year that it had confiscated the assets, including a spa, a duty-free shop and other businesses built and owned by the South Korean government.

Fourteen South Koreans were staying in the area maintaining facilities owned by Hyundai and other private South Korean investors. The Unification Ministry, a South Korean government agency in charge of inter-Korean relations, said it would take “all possible diplomatic and legal measures to protect the property rights of our government and enterprises.”

Hyundai Asan, which developed and ran the resort, warned that anyone who bought facilities at the resort would be implicated in international lawsuits.

After attracting 2 million South Korean tourists by sea or by a road built across the nations’ heavily armed border, the project came to an abrupt halt in 2008, after the female South Korean tourist strayed outside the tourism zone one morning and was shot and killed by North Korean soldiers.

Xinhua, the Chinese state media outlet reports that the South Koreans have rejected this move by the North Koreans:

“The government cannot accept North Korea (DPRK)’s arbitrary measures, and we’d like to make it clear the North should be held responsible for all consequences,” Chun Hae-sung, spokesman for the unification ministry in Seoul, told reporters.

“The government will seek all necessary measures including legal and diplomatic ones, and will stay in close contact with business operators involved,” he added, calling Pyongyang’s announcement “regrettable.” The ministry oversees inter-Korean affairs.

The Choson Ilbo points out some additional points of economic interest:

The greatest concern for South Korean officials is the potential conflict over power generators Hyundai Asan installed at Kosong Port to supply electricity to the resort. Since 2008, Hyundai has been operating only one of them to supply power for the remaining staff. If Asan halts the power generators, North Korea cannot use the facilities in the resort. This may be why the North has threatened to take “stern measures” should South Korea “cause damage to assets” left in the resort.

While freezing the South Korean assets, North Korea has been trying to organize tours to Mt. Kumgang on its own. Some analysts say the North hopes to get another country to operate the tours to generate hard cash. Until the tours were suspended in 2008, North Korea made US$487 million from Hyundai Asan.

A separate Choson Ilbo article questions whether the operation will be as profitable if targeted at non-South Koreans:

But of the total 1.93 million visitors to the resort between 1998 and 2008, non-Koreans accounted for only 12,817, or less than 1 percent, which comes to just four a day. It was South Koreans who were willing to pay a large amount of money, including fees to cross the border, to briefly set foot on Korean soil on the other side of the demilitarized zone, But for foreigners, the resort is just a place in the middle of nowhere.

Foreign investors who were cautiously calculating the viability of investments in North Korea were probably shocked to see the seizure of South Korean assets. The North scrapped a 50-year contract with Asan as if it was not worth the paper it was written on and even invented a new law enabling it to sign a deal with somebody else. Which investor in his right mind would want to put his money in a country like that?

The Donga Ilbo breaks down the cost of the fixed capital investments Hyundai-Asan made in the Kumgang Resort:

South Korean assets seized by the North are worth 484.1 billion won (447.2 million dollars). Of the amount, Hyundai Asan invested 226.9 billion won (209.6 million dollars), including hotels in the resort, and the South Korean government spent 124.2 billion won (114.7 million dollars) to build a meeting venue for Korean families separated during the Korean War, duty-free shops and a cultural hall.

Hyundai Asan’s three power generators with a capacity of 1,700 kilometers at Goseong dock are one of the major assets in the tourist region.

North Korea, however, is unlikely to attract foreign tourists to Mount Kumgang on its own or sell the facility to foreign investors. It continues to search for a new partner in China, Japan and the U.S.

Rumor also has it that that North Korean leader Kim Jong Il has ordered that the Mount Kumgang tour be made into a luxury business but low feasibility has prevented progress in the project.

A timeline of Kumgang stories from the shooting until the present can be found here.

Read the full stories here:
North Korea to Auction Resort Owned by South
New York Times
Choe Sang-hun

S. Korea rejects DPRK’s threatened disposal of properties

N.Korea Orders S.Koreans Out of Mt. Kumgang
Choson Ilbo

N.Korea Shoots Itself in the Foot Again
Choson Ilbo

NK declares disposal of S.Korean assets in Mount Kumgang
Donga Ilbo


Steve Park claims MOU with DPRK over Kumgang

Saturday, August 6th, 2011

Steve Park, president of Korea Pyongyang Trading USA which imports a North Korean Soju (see previous posts here), claims that he has signed a MOU with the DPRK over tourism in the Kumgang resort.  This claim has been picked up by numerous media outlets.  It might be true, but I have yet to see the MOU documentation or any corroboration in the DPRK media.

According to the Hankyoreh:

Park Il-woo, also known as Steve Park, who has long conducted business with the communist nation, said his firm recently signed a memorandum of understanding (MOU) on the Mount Kumgang tourism business. He is the president of Korea Pyongyang Trading U.S.A., which imports a North Korean liquor branded Pyongyang Soju.

The MOU stipulates that the company will be in charge of marketing, investor relations and tourist recruitment for what is said to be the most scenic mountain on the peninsula. Under the agreement, the mountain area will be developed into a multi-purpose resort.

He said he plans to visit North Korea this weekend or next week to discuss concrete business plans. He expressed confidence that he will be able to attract substantial U.S. investment for the business. The North is also expected to select Japanese and Chinese business partners soon, he added.

According to another article in the AFP:

“I understand (the North) will also select Japanese and Chinese business partners soon,” said Park, whose company imports a North Korean liquor branded Pyongyang Soju.

No sooner had the deal been announced than the South Koreans raised the point that Mr. Park will need the permission of the US government to carry out his business plans. According to Yonhap:

A small New York-based company selected by North Korea to revive a stalled tour program to a mountain resort in the isolated country needs the endorsement of the U.S. government for its project, a South Korean official said Friday.

The U.S. Executive Order 13570 that took effect in April prohibits the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea.

Under the order, the envisioned tour program to North Korea’s Mount Kumgang by Korea Pyongyang Trading U.S.A. is subject to the U.S. government’s approval, the official said.

The company, headed by a Korean-American businessman, has yet to file an application with the U.S. government for approval of its proposed tour project in the North, the official said on the condition of anonymity, citing office policy.

U.S. State Department officials in Washington were not immediately available for comment.

The comments by the South Korean official came days after the New York firm signed a memorandum of understanding with the North on the tour program.

According tot he Donga Ilbo, Mr. Park has not yet submitted any paperwork to the US government:

Korea Pyongyang Trading USA is known to have not yet submitted an application to the U.S. government for business with the North.

Another South Korean government source said, “Considering the scale and situation of the trading company that was reportedly chosen as the new operator of the Mount Kumgang tour program and under the conditions of U.S. sanctions against the North and the executive order, we cannot confidently say the Mount Kumgang tour project will be implemented.”

These views by Seoul officials apparently reflect their internal judgment that they cannot accept Pyongyang`s unilateral revocation of Hyundai Asan’s exclusive right to the tours and appointment of a new operator.

The South Korean government understands that the North is taking steps to attract another foreign business other than the American company. Government officials in Seoul predicted, however, that the North is unlikely to find an operator due to U.S. sanctions against Pyongyang, limited demand for tours, and lack of infrastructure in the North.

A timeline of Kumgang stories from the shooting until now can be found here.


South Korean companies sue for sanctions losses

Thursday, July 21st, 2011

According the Hankyoreh:

South Korean businesses engaged in economic cooperation with North Korea who have incurred major losses due to sanctions are showing signs of working together in response to their predicament, including suing the government for compensation. The South Korean government imposed the sanctions on North Korea in connection with the sinking of the Cheonan.

Around 10 heads of businesses investing in tourism at Mt. Kumgang, businesses planning to move in to Kaesong Industrial Complex, and businesses trading with other parts of North Korea are known to have gathered in central Seoul on July 19 and agreed to embark jointly on responsive measures, including taking legal action against the government.

“In a situation where there is no sign of an improvement in inter-Korean relations, businesses cooperating with North Korea are going beyond the limits of their tolerance,” said one official working in a field related to inter-Korean economic cooperation during a telephone interview with the Hankyoreh on July 20. “Those taking part in the meeting easily agreed to respond as a group, including by suing the Ministry of Unification for damages. They decided to meet once more some time around next week and decide upon a specific plan. Around ten businesses are currently preparing to sue.”

The affected businesses have decided to demand that the government withdraw the Cheonan sanctions while urging it to provide systematic guarantees that North-South economic cooperation can continue in a stable manner regardless of the political situation. They are also known to be considering plans such as one-man protests, returning their business licenses and issuing a statement.

Two materials processing companies, including CEO Kim Chan-ung’s NFN, have sued individually for damages, but this is the first time since the sanctions were imposed, on May 24 last year, that businesses dealing with North Korea have acted together against the government in an organized manner.

Read the full story here:
S.Korean businesses to sue for losses from sanctions
Kim Jong-cheol


Air Koryo revives Pyongyang – Shanghai route

Monday, July 4th, 2011

According to the Choson Ilbo:

Chinese tourists arrive in Pyongyang on Friday [July 1, 2011] on the inaugural flight of North Korea’s national airline Air Koryo from Pudong Airport in Shanghai to the North Korean capital, in this photo released by Korean Central News Agency on Saturday.

It is the third direct route to Pyongyang from China after flights from Beijing and Shenyang and will operate every Tuesday and Friday.

Additional information:

1. I am not sure about the flights to Shenyang, but the Beijing-Pyongyang route takes place on Tuesday and Saturday.

2. Air Koryo temporarily ran a Shanghai-Pyongyang route last year for “Chinese volunteers” who wanted to visit North Korea for the 60th anniversary of the Korean war.

3. Air Koryo reportedly launched a Pyongyang-Kuwait route earlier this year.

4. No doubt these Chinese tourists will be enjoying the newly “acquired” properties in the Kumgang resort.

4. UPDATE: This from KCNA (2011-8-9):

Many tourists have come to the DPRK by chartered planes.

The Shanghai-Pyongyang air service, which started on July 1, is available on Tuesday and Friday every week.

Tourism through the Xian-Pyongyang air service began on July 28.

Malaysian tourists will come to Pyongyang through direct flight from Kuala Lumpur from August 19.

Along with the increase of tourists, their entry and exit procedures have been simplified.

Under the agreement between the DPRK International Travel Company and a Chinese immigration office, Pyongyang and Pudong airports offer visa exemption to tourists taking the Shanghai-Pyongyang air service.


Friday grab bag: everything but the kitchen sink

Thursday, June 2nd, 2011

DPRK Public Trial Video

There is a video on YouTube (via South Korean television) that purportedly shows a public trial that took place last April in Sinuiju (RFA). The trial took place in the Sinuiju central Square:


There is an (increasingly hard to find) older video of a public trial in Hamju County (함주군) which clearly matches the satellite imagery. You can see the video here.  The stadium where it was filmed is here.

Kim Jong-il’s Only Televised Speech in the DPRK

In an earlier “Friday Fun” post, I linked to a parody of Kim Jong Il’s only televised speech in the DPRK.  Here is his actual and only speech!

Kimchi Dog

For the dog lovers: I thought this clip of a North Korean dog carrying a kimchi bucket near Kim Il-sung square in Pyongyang was cute.

DPRK No 2 Happiest Country?

Chinese blog post, picked up by the Shanghaiist, went viral this week.  The story:

China is the happiest place on earth(!!) according to a new global happiness index released by North Korea’s Chosun Central Television. China earned 100 out of 100 points, followed closely by North Korea (98 points), then Cuba, Iran, and Venezuela. Coming in at 203rd place is America (or rather “the American Empire”, 美帝国), with only 3 happiness points. South Korea got a measly 18 points for 152nd place.

Frankly, I don’t think most North Koreans would believe this story if they saw it on television.

I tried to learn more, but the source material is proving difficult to locate. There is no mention of the “study” in KCNA.  I have also gone through my archives of recent North Korean television footage and I am unable to locate the broadcast.  Does anyone know when the original video clip was aired?

For what it is worth, Freedom House just ranked the DPRK as the country with the world’s worst human rights record (again).

Did the DPRK Get a New Yacht?

While scouring new imagery of Wonsan on Google Earth, I noticed that a port, holding what many believe are ships for elite use, seemed to be +1 yacht.  Both are about 48m long.  The two pictures above are dated 2002-11-11(left) and 2009-10-3 (right). It is possible that the second yacht was moved from another location.  In 2009 the sale of two yachts to the DPRK was detected and halted.

New Google Earth Imagery of the Kumgang Resort

We can now see all the properties that the DPRK has “seized” from Hyundai-Asan: Family Reunion Center,  Kumgangsan Hotel, Mokranwon Restaurant, Kumgang Golf Course and more!


SPA designates Kumgang resort intl tourism center

Friday, April 29th, 2011

UPDATE: DPRK to Set Up Special International Tour Zone at Mount Kumgang
Institute for Far Eastern Studies (IFES)
NK Brief (11-05-2)

According to KCNA news agency, the Presidium of the DPRK Supreme People’s Assembly issued a decree on April 29 to set up a special zone for international tours at Mount Kumgang. It reported the special zone in Kangwon Province would include Kosong-eup and Onjong-ri of Kosong County; Samil-po, Hae-Kumgang, and Nae-Kumgang areas in Kumgang County, and Thongchon County.

The Central Tourist Guidance Agency expressed its intentions of increasing new tourist destinations depending on the progress made in the special zone. In addition, it also announced the annulment of October 2002 decree on the Kumgang Special Tourism Zone, which rescinded the exclusive rights of Hyundai Asan.

Previously on April 8, the DPRK’s Korean Asia-Pacific Peace Committee (KAPPC) informed Hyundai Asan that it would retract the monopoly rights of Hyundai. Instead, it expressed plans of entrusting the tours from the North through foreign businesses while Hyundai will continue to lead the tours from the South. The North announced the Mt. Kumgang tours will be renewed through appropriate national measures.

The KCNA explained, “The DPRK’s sovereignty will be exercised in the special tour zone.” Additionally, the DPRK is encouraging free investment in the special zone by corporations, individuals and other economic bodies and such investments are protected by law.

On the May issue of South Korean monthly magazine Minjog 21, the Committee of Investment and Joint Ventures of the DPRK and Kempinski Group was reported to have reached an agreement on its entrance into the Kumgang tourism project. The magazine also reported the Kempinski Group’s plans of modernizing the Wonsan Airport, development of Wonsan City into a resort town, and building roads connecting Wonsan with Kumgang.

Kempinski Hotels is a luxury hotel group known for its five-star hotels and resorts and recently expanded into Asia with current projects underway with India and China. Kempinski is majority owned by the Crown Property Bureau of Thailand and the royal family in Bahrain. Once the Kempinski Hotel is completed in Wonsan, it is expected to become an international resort town linked with Mt. Kumgang Special Zone.

The Mt. Kumgang tours from the North are expected to be managed by the Kempinski Hotels while the tours from the South will be still managed from Hyundai. An interview on April 13 by Ri Jong Hyok, vice-chairman of the KAPPC commented, “The buildings and facilities built by Hyundai will come to ruins if left at its current unoccupied stage. This is the reason why we are attempting to restart the tours, but only until the South decides to resume the tours.”

The Committee of Investment and Joint Ventures was upgraded from Joint Venture and Investment Guidance Bureau last July, becoming a central state organization in charge of all projects related to investments and joint ventures from overseas.

ORIGINAL POST: According to Yonhap:

North Korea’s rubber-stamp parliament said Friday that it will set up a special zone for international tours of the country’s troubled mountain resort in an apparent move to induce foreign investment.

The North “will encourage free investment in the development of the special zone by corporate bodies, individuals and other economic bodies and will protect by law the invested capital and properties and income and other profits to be gained through business,” the North’s Supreme People’s Assembly said in a decree carried by the country’s official Korean Central News Agency (KCNA).

The legislature said North Korea’s sovereignty will be exercised over the zone that includes several areas on Mount Kumgang, a scenic resort on the country’s east coast.

It also said the agency in charge of tourism will take relevant measures to increase new tourist destinations, depending on the progress in the special zone development. No details were provided.

Lee Jong-joo, a spokeswoman for South Korea’s Unification Ministry handling inter-Korean affairs, said the North’s move appears to be aimed at attracting foreign capital to develop the resort.

A spokesman for Hyundai Asan, a key South Korean tour operator in the mountain resort, said his company had no immediate comment on the North’s announcement. He asked not to be identified as he was not authorized to speak to media.

The decree came weeks after Pyongyang terminated exclusive tourism rights for Hyundai Asan, citing skepticism over the resumption of the joint venture.

The two Koreas launched the joint tour program in 1998 as part of moves to boost cross-border reconciliation and cooperation, providing a legitimate source of hard currency to the cash-strapped North.

However, Seoul suspended the tour program in 2008 when a female South Korean tourist was shot dead after straying into an off-limits military zone near the resort.

Pyongyang claims it has done everything to shed light on the shooting and guarantee the safety of future tourists, but Seoul says it has yet to receive a formal apology for the shooting or government-to-government promises to enhance safety.

Here is the KCNA statement:

Pyongyang, April 29 (KCNA) — A special zone for international tour of Mt. Kumgang will be established in the DPRK.

A decree on this decision was issued by the Presidium of the DPRK Supreme People’s Assembly on Friday.

According to the decree, the special zone is to be set in the area of Mt. Kumgang in Kangwon Province and the zone will include the township and some areas of Onjong-ri in Kosong County, Lagoon Samil, Sea Kumgang area, Inner Kumgang area of Kumgang County and some areas of Thongchon County.

The DPRK sovereignty will be exercised over the zone.

The DPRK will encourage free investment in the development of the special zone by corporate bodies, individuals and other economic bodies and protect by law the invested capital and properties and income and other profits to be gained through business.

The Central Tourist Guidance Agency shall take relevant measures to increase new tourist destinations, depending on the progress made in the SZ development.

The decree of the SPA Presidium on “Setting Up Mt. Kumgang Tourist Zone in the DPRK” issued on Oct. 23, 2002 is no longer valid.

Aside: So there are two DPRK agencies that deal with tourism: KITC and the “Central Tourist Guidance Agency”?

Historical information:

The Kumgangsan resort was the scene of a terrible tragedy, the shooting of a South Korean tourist.  Allowing a joint-Korean investigation of the murder became a precondition by the South Korean government for resuming tourism to the resort.

On March 4th 2010, the DPRK first threatened to revoke contracts with the South Korean Hyundai-asan stating that a future guarantee of safety was sufficient for resuming tourism.

Later in th month, Hyundai-asan’s chief offered to resign.

In April 2010, the DPRK “seized” the Hyundai properties in the Kumgangsan resort.

Shortly afterwards, Chinese tourists began arriving at the resort (here and here).

The Donga Ilbo reported that the NDC took over the properties and put them in the Korea Taepung International Investment Group portfolio.  If the property was under Taepung control and has now been put under normal ministerial control, then this signals that Taepung’s sun might have set.

If possible, I would expect that Hyundai-asan will attempt to bring suit in South Korea against whichever company chooses to set up in the zone.

Read the full sotry here:
N. Korea to set up special int’l tour zone at Mount Kumgang


Gyeongui line to resume normal operations

Wednesday, April 20th, 2011

Institute for Far Eastern Studies (IFES)
NK Brief (11-04-20)

Railroad services to Kaesong Industrial Complex on the Gyeongui Line increased from 21 to 23 times a day from April. Mainly a seasonal change, the last departure service into Kaesong has been pushed back to 5:00 pm from 4:30 pm and the arrival time also changed accordingly from 5:00 pm to 5:40 pm.

With the half of the Mount Kumgang tours, the Donghae Line is running on a more flexible schedule based on demand. Currently both lines are operating. There are 417 South Korean citizens currently residing in North Korea, with the majority (404 people) at the Kaesong Industrial Complex.

According to the Export-Import Bank of Korea, the volume of loans by the businesses operating economic cooperation with North Korea increased over the years, from 10.8 billion KRW in 2008, to 15.4 billion KRW in 2009, and 41.6 billion KRW in 2010. The increase comes as a surprise considering the enforcement of sanctions against the North from the Cheonan incident caused all inter-Korean exchanges and cooperation to discontinue except for the KIC.

The Export-Import Bank (Exim Bank) in coordination with the Ministry of Unification has continued to provide loans to businesses engaged in inter-Korean cooperation through a special loan program called, “Special Economic Exchanges and Cooperation Loan.” Special consideration was given to these small businesses suffering since the imposition of government sanctions.

Last year, a total of 25 businesses (11 economic cooperation-related, 13 exchange-related) received special loans from the Exim Bank. The loans were used mainly for stabilizing the business management to cover various business expenses including tariffs, shipping, material, distribution, manufacturing and labor costs, as well as other additional taxes and interests.

On the other hand, North Korea’s Korean Asia-Pacific Peace Committee informed Hyundai that it would retract the company’s monopoly over the tour of Mt. Kumgang, which was supposed to expire in 2028. Hyundai Asan expressed regret over the North’s decision by saying, “The agreements that were reached on Mt. Kumgang tourism must be honored and cannot be declared void or lose their validity on unilateral notification. The North’s statement should be withdrawn.”

The spokesperson of Hyundai also stated, “The root of this problem is caused by the stalled tourism project. The only solution is to resume the tours to Mt. Kumgang at the earliest time possible.” It further added its intention of working closely with the South Korean government to restart the tours. Since the suspension of Mt. Kumgang tours after a female tourist was shot and killed in July 2008, Hyundai Asan has been hitting dead ends with the project.

Regarding its plan to retract Hyundai, North Korea is pointing the finger at the “South Korean government’s vicious North Korea policy.” According to North’s Uriminzokkiri website, terminating Hyundai’s monopoly rights was an “inevitable decision based on low prospect for resuming the tours of Mount Kumkang.” It further added, “Although the South Korean government is condemning our decision as against international norms, the situation is compelling the DPRK to exercise our rights which is in accordance with domestic and international laws.”


DPRK rescinds Hyundai’s Kumgang contract rights

Monday, April 11th, 2011

UPDATE 2 (2011-4-11): South Korea has declared the move illegal.  According to the AFP:

South Korea Monday criticised North Korea’s threat to strip a Seoul firm of its exclusive right to run tours to a mountain resort in the communist state, calling the move illegal and unacceptable.

The North said Saturday it may deprive Hyundai Asan of its monopoly over tours to scenic Mount Kumgang, where the firm has invested millions of dollars and has a 50-year agreement reached in 2000.

“The North’s claim… is in violation of agreements made at business and government levels as well as international customs,” said Chun Hae-Sung, a spokesman for the South’s unification ministry that handles cross-border affairs.

“The decision is absolutely illegal, illegitimate and unacceptable and should be withdrawn immediately,” Chun said.

UPDATE 1 (2011-4-11): The DPRK has formally ended Hyundai’s contract.  According to the Choson Ilbo:

North Korea has unilaterally ended a long-standing agreement that gave South Korea’s Hyundai Asan the sole rights to operate package tours to Mt. Kumgang. The tours have long been suspended, but Hyundai Asan has put a significant amount of money into accommodation and other infrastructure in the scenic resort.

In a statement on Friday night, the North’s Asia-Pacific Peace Committee said, “We’re invalidating the clause on the exclusive right given to Hyundai in the agreement on Mt. Kumgang tourism that we concluded with the company.” It said Hyundai Asan may continue to operate tours from the South Korean side, but the committee “will take care of the tours arranged through the North Korean side.”

A Hyundai Asan spokesman said the following day North Korea should withdraw the decision “since no terms of the agreement can be canceled or invalidated unilaterally by either side.”

Unilateral Decision

The two sides signed an agreement in October 1998 giving Hyundai Asan, a subsidiary of the Hyundai Corporation not to be confused with Hyundai Motor Group, the exclusive right to operate the tours.

In 2002, the regime granted Hyundai Asan the right to use of land in the Mt. Kumgang area until 2052, but it confiscated the property after South Korea suspended the tours following the shooting death of a tourist in July 2008.

According to Hyundai Asan, North Korean officials summoned staff to Mt. Kumgang on March 15 and 30 and told them the North would now promote tours on its own. On March 30, the North Korean also proffered a written document to a Hyundai Asan staffer, who refused to accept it saying it contravenes the original agreement.

The decision to cancel the deal nonetheless shows how desperate the North is to earn hard currency, since the apparent aim is to promote tours for Chinese visitors instead or indirectly pressure the South Korean government into resuming the tours.

Seoul says it will not resume the tours until the North allows an investigation of the shooting, gives firm safety guarantees, and promises to prevent similar incidents. There have been talks about their resumption, but the North’s sinking of the Navy corvette Cheonan in March last year and shelling of Yeonpyeong Island in November effectively strangled them at birth.

Chinese Tourists

It is unlikely that the North can plug the gap with revenues from Chinese tourists. Hyundai Asan says about 1.96 million tourists visited Mt. Kumgang over the past 10-odd years, but a mere 12,000 came from countries other than South Korea.

It remains to be seen whether the North will use the Hyundai-owned facilities to accommodate Chinese visitors.

Hyundai Asan has spent a total of W754.1 billion (US$1=W1,084) on developing nearby land and building facilities such as a power plant and a hotel. Other South Korean agencies and companies, including the Korea Tourism Organization and the National Agricultural Cooperative Federation, invested W133 billion. After tours were suspended, Hyundai Asan left 16 staffers behind at Mt. Kumgang to look after its properties.

ORIGINAL POST (2011-4-9): According to Yonhap:

Apparently growing impatient with South Korea’s lukewarm response to its dialogue offer, North Korea announced Friday that it could terminate an exclusive contract with a South Korean conglomerate for tourism at Mount Kumgang, a resort along its east coast.

In a statement carried by the official news agency KCNA, the Asia Pacific Peace Committee, a state organ in charge of inter-Korean relations, said, “There is no more prospect of resuming the tour of Mount Kumgang.”

“In this regard it informed the Hyundai side of its stand that it may terminate the validity of the provision of the agreement on tour of Mount Kumgang signed with the Hyundai side which calls for granting it monopoly over the tour,” it said, referring to Hyundai Asan, the South Korean operator of Mount Kumgang tourism program.

The statement also added Hyundai could continue conducting tours for South Koreans but that Pyongyang “may” take charge of tours to Mount Kumgang and elsewhere for North Koreans and also entrust an overseas business professional with such tours.

South Koreans’ tours to Mount Kumgang, once a cash cow for the impoverished North, have been suspended since the summer of 2008, when a female South Korean tourist was shot dead after straying into an off-limits military zone.

Pyongyang has been seeking to resume the joint venture, but Seoul has demanded a formal apology for the killing of the housewife, along with measures to prevent a recurrence of such an incident and a guarantee of tourists’ safety.

Friday’s announcement was viewed as aimed at putting pressure on the South to restart the tourism business.

Hyundai Asan said it was working to identify North Korea’s true intentions.

“The company is working to find out at the earliest possible date what the North’s true intentions are,” a Hyundai Asan official said, asking not to be identified.

North Korea froze Hyundai Asan’s assets at Mount Kumgang last year in an apparent attempt to pressure South Korea to resume tours to the mountain, a spiritual destination for Koreans on both sides of the border.

After years of threats and provocative acts, highlighted by two deadly attacks in 2010, Pyongyang has been appealing to Seoul for talks. Conservatives here say the North wants aid from the South and a dialogue with the United States.

Here you can see more of Seoul’s demands for resuming Kumgang tours.

Here and here you can find more information on Seoul’s demands for resuming Kumgang Tours.

Previous posts about the Kumgang Resort can be found here.



Kim Jong-il pays respects to memory of Chung Ju-yung

Tuesday, March 22nd, 2011

Pictured Above: Chung Ju-yung Stadium in Pyongyang
(Google Earth:  39.040093°, 125.735237°)

According to the Korea Herald:

North Korean leader Kim Jong-il has sent a verbal message to commemorate the 10th anniversary of the death of a noted South Korean industrialist who pioneered cross-border economic projects, the North’s media said Saturday.

Chung Ju-yung, the then chairman of Hyundai Group, initiated a series of major economic projects in North Korea starting in 1998, including a sightseeing tour to scenic Mount Geumgang on the North’s east coast. He died on March 21, 2001.

In the verbal message, the North Korean leader spoke highly of the South Korean industrialist, saying that he did the right thing to promote national reconciliation, the North’s Korean Central News Agency said in a report.

“Chung Ju-yung paved the way for national reconciliation and cooperation and did really a great job for the development of the inter-Korean relations and the sacred cause of national reunification,” the KCNA quoted the leader as saying in the message.

Kim also expressed hope that everything would go well for the Chung family and Hyundai, the KCNA report said.

The report did not say when and how the North Korean leader’s message was conveyed to the Chung family in Seoul. Chung’s eldest son, Chung Mong-koo, heads the nation’s largest automaker, Hyundai Motor Co.

According to the Choson Ilbo:

North Korea has sent a wreath to Hyundai Group to commemorate the 10th anniversary of the death of Hyundai founder Chung Ju-yung.

The wreath that read “In memory of Chung Ju-yung” was delivered from Pyongyang’s Asia-Pacific Peace Committee to Hyundai staffers at the joint-Korean industrial complex in Kaesong.

On Friday North Korean leader Kim Jong-il spoke highly of Chung for his role in paving the way for national reconciliation and cooperation.

Chung initiated various projects with the Stalinist state including the Mt. Kumgang package tours in the North and had sent more than one-thousand cows over the demilitarized zone to North Korea.

The Daily NK also offers some cultural background