[EDITORIALS]Tourism Project Needs ExplainingThe Korea National Tourism Organization signed a contract Wednesday with the Hyundai group for a consortium to participate in Hyundai's Mount Kumgang tourism business. The contract was signed suddenly. No prior negotiations had been made public and only rumors regarding the agreement had been circulating. We feel that the background of the contract needs to be explained.
Few will oppose the idea that the Mount Kumgang tourism project should go on because it is a symbol of inter-Korean reconciliation. But it is improper that the government makes up for Hyundai's losses from the unreasonable contract with North Korea on the tourism license fee. Hyundai came to suffer failure in its Mount Kumgang tourism project because it agreed with North Korea to pay $12 million every month regardless of the business situation, based on a wrong estimation of the tourism project's profitability.
After the agreement, Hyundai had no choice but to delay payment and reduce the operation of cruise ships to Mount Kumgang, as the business accumulated losses. Hyundai has recently said that it agreed with North Korea to begin overland tours to Mount Kumgang in next year, on the condition that Hyundai should immediately pay the North $22 million for license fees in arrears. Hyundai insisted that the Mount Kumgang tourism project will become profitable when overland tours begin, because the number of tourists will increase since the cost of tourism will become less expensive. That's why the Korea National Tourism Organization is participating in the business.
But according to the contract between Hyundai and the Korea National Tourism Organization, Hyundai's invest is in the form of real estate, such as hotels and other facilities, which have been already built, while the organization should put cash into the business. In addition, the cash will come from the state-run Inter-Korean Economic Cooperation Fund. Therefore, the organization is no more than a channel through which Hyundai uses the inter-Korean economic cooperation fund. Since the government is the largest shareholder in the Korea National Tourism Organization and plans to provide the company with 33 billion won annually, beginning this year, the organization is as good as a public corporation operated on taxes. The Korea National Tourism Organization has so far focused on tourism promotion business. Accordingly it is inappropriate that the organization directly participate in the North Korea project.
Until overland tours to Mount Kumgang actually begin, the tourism business will continually lose money. How will the consortium supply that money? Korea National Tourism Organization's participation also raises a question whether it is going to be used as an excuse to lure other private companies to the business.
The Mount Kumgang tourism project should start with the correction of unreasonable tourism license fee contract. And it is unfit for the government to pour money into a project operated by a certain firm. Such improper support by the government is causing rumors of a hidden deal between the government and Hyundai.
The United States and other foreign countries are likely watching suspiciously the North Korea's use of the tourism fee. Accordingly, it is a great mistake for the government to provide the Inter-Korean Economic Cooperation Fund to the business, in such a situation. For proper use of the Inter-Korean Fund, the national assembly's approval is a must.