North Korea is holding South Korean construction cranes, bulldozers, road graders, dump trucks and almost 200 cars hostage at the site of a suspended power plant project as a bargaining chip in the international standoff over its bid to develop nuclear weapons.
The South Korean companies that own the construction equipment are dismayed since North Korea has refused to back down on demands for compensation for the suspension of the power-plant program.
The Korean Peninsula Energy Development Organization (KEDO), the New York-based consortium set up to build safe power plants in North Korea in exchange for Pyongyang's agreement to dismantle its weapons program, says no progress has been made on the impasse.
Construction of two 1,000-megawatt light-water reactors to replace North Korea's Russian-model, plutonium-producing nuclear plants was suspended last year after the US raised suspicions that Pyongyang also concealed a secret program to enrich uranium to weapons grade.
The freeze on the nuclear plant project was extended last week for another year, effective Dec. 1, by KEDO, which is led by the US, Japan, South Korea, and the EU.
The Bush administration has been contending that the project has "no future," as the State Department said a year ago.
South Korea and Japan, which are most heavily invested in construction of the US$4.6 billion nuclear plant project about 200km north of the 38th parallel on North Korea's east coast near Sinpo, hope to keep it on the table to entice North Korea back into disarmament talks.
KEDO's extension of the freeze noted that "the future of the project will be assessed and decided by the Executive Board before the expiration of the suspension period," suggesting it will be revived or killed based on North Korea's willingness to rejoin disarmament talks in coming months.
But in the meantime, North Korea has barred the removal of 93 pieces of heavy construction equipment, including three cranes, plus bulldozers, steam shovels, dump trucks, road graders and forklifts, and about 190 South Korean cars and some buses from the site at Kumho, demanding that the US pay unspecified "compensation" for the suspension of the program.
Pyongyang has threatened to go in and seize the equipment along with computers, office equipment and any technical documents still on the site, but has made no move to do so.
KEDO's executive director, Charles Kartman, raised the issue in talks with North Korea prior to the consortium's announcement Nov. 26 of the extension of the freeze on construction.
KEDO spokesman Brian Kremer confirmed on Monday that no progress has been made recently on breaking the impasse, but added, "We're certainly hopeful that KEDO can resolve this issue."
The South Korean companies with the most equipment at stake are Hyundai, Doosan, Daewoo and Dong-ah, which subcontracted with Korean Electric Power Co to provide construction work.
A spokesman for the four major Korean subcontractors, speaking in Seoul on condition of anonymity, said the seized equipment amounted to a major loss and said the situation was "awkward" for the construction consortium since they had not been compensated for it.
Their equipment had been shipped from South Korea directly to a port at Kumo, avoiding the difficulty of negotiating road access through the almost hermetically sealed North Korea.
KEDO is continuing to pay leasing fees to the South Korean companies "for equipment that is not being used. We have a budget that we have to live within," Kremer said. The reduced KEDO staff at the Kumho site is maintaining the partially built project and caring for the equipment and vehicles.
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