Fri, Jul 03, 2009 - Page 5 News List

North and South Korea hold talks on Kaesong estate

AFP , SEOUL

North and South Korea held fresh talks yesterday on the fate of their last major business project amid continuing tensions over the communist state’s nuclear and missile programs.

The third round of discussions is expected to indicate whether the North will ease its demands for huge extra payments from Seoul now that it faces international financial and other sanctions.

The South rejected the North’s demands in a morning session at the Kaesong joint industrial estate just north of the border, a senior Seoul unification ministry official told reporters on condition of anonymity.

It was not yet known if there would be an afternoon session.

“Our side said in a keynote speech that we cannot accept North Korea’s unreasonable demands that it has presented over the joint park after unilaterally scrapping existing contracts,” Yonhap news agency quoted the official as saying.

The North faces tighter curbs on its lucrative missile exports under UN and US sanctions imposed in response to its nuclear test.

The Seoul-funded estate is an alternative source of hard currency for the impoverished North, which received US$26 million last year in wage payments.

Pyongyang’s delegation, at the first round of talks last month, stunned Seoul’s team by demanding a wage rise for its 40,000 workers to US$300 a month from around US$75.

It also demanded an increase in rent for the estate to US$500 million, compared with the current US$16 million for a 50-year contract.

At the second round, the North stuck to its financial demands, but offered to lift restrictions on border crossings it imposed last December.

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