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North inks joint deal with China to develop port

Published: 10 Sep. 2012, 20:42

North Korea reached a new deal with a private Chinese company to develop a local harbor in the northeast region of the country and found a joint-venture firm to carry it out, just three weeks after they signed an agreement to begin full-fledged development in joint economic zones last month.

The Yanbian Daily, a state-run, Korean-language newspaper in China for ethnic Koreans living in Yanbian, a Korean Autonomous Prefecture in Jilin Province, yesterday reported that the Yanbian Haihua Group, a private Chinese developer, signed a formal contract with a North Korean firm to develop the Chongjin port in North Hamgyong and founded a joint-venture company for the harbor development project.

In mid-August, Jang Song-thaek, uncle of North Korean leader Kim Jong-un, signed a deal with Chinese government officials to carry out full-scale construction for a harbor and railroads in the so-called Rason Special Economic Zone, a northeastern North Korean region bordering with China.

Under the new contract made on Sept. 1, both sides agreed to co-management of two piers of the port, which can handle 7 million tons of cargo at maximum in total, for the next 30 years.

The North Korean regime has received 6.12 million euros ($7.82 million) of rental charges for the 3,180 square-meter (34,229 square-feet) piers and a 4,000 square-meter cargo yard from the Chinese company and paid the money to fund the newly-built joint venture, the newspaper said.

The Chinese company will invest a total of 13 billion won on developing the port, such as building new equipment and facilities, which accounts for about 60 percent of the entire capital spent on the project.

According to the daily, they have already set up a series of detailed regulations on employment management, profit distribution and the formation of a new board with a goal to raise cargo traffic to one million tons by 2015.

The Yanbian group already spent 60 million yuan ($9.47 million) on manufacturing cranes and building necessary equipment, the newspaper said, and also completed work on stabilizing the 36,000-square meter grounds of the construction site.

They are scheduled to finish manufacturing cranes within the year to begin a full-fledged plan for domestic and international transportation through the port.

The daily predicted the North Korea-China harbor company will play a pivotal role in fostering Beijing’s plan to have more access to the Pacific through the ports of eastern North Korea.

Still, South Korea’s Unification Ministry remains suspicious about the project.

“We still haven’t figured out anything on the contract yet,” Kim Hyung-suk, spokesman of the ministry told the Korea JoongAng Daily.

“They have strived for the harbor project since last year, but it costs lots of money with a high risk of failure.

“It could be a bluff by the North Korean regime desperate for developing the project.”

By Kim Hee-jin [[email protected]]