Final trial run scheduled in cross-border trade project

A third trial run in a three-party trade project involving Seoul, Pyongyang and Moscow that will transport around 120,000 tons of coal from Russia to three Korean ports is scheduled from Nov. 17 to 30, the Ministry of Unification said on Friday.

A consortium of three South Korean companies - top steelmaker Posco, the Korea Railroad Corporation (Korail) and shipping company Hyundai Merchant Marine - are involved in the project, which will see the coal shipments transported to Rajin, North Korea, from the Russian border city of Khasan on a reconnected 54-kilometer (34-mile) railway before making its way down to South Korea.

The venture, referred to as the Rajin-Khasan logistics project, will see 120,000 tons of coal transferred to the Gwangyang port in South Jeolla and Pohang port in North Gyeongsang, and another consignment of drinkable water in 10 containers shipped to Busan over the two-week trial-run.

Afterwards, the companies will then determine whether to forge a formal contract for the project, based on the outcomes of three test runs.

It was anticipated earlier that the formal contract could be signed for the project by the end of this year. But given the timing of the third trial, it is likely that the final decision will be made next year.

“During the trial run, the companies will assess the loading capacity at North Korea’s Rajin port,” a ministry official said on the condition of anonymity.

“The government is taking the administrative procedures necessary for the third trial run.”

The ministry official added that none of the companies had requested government subsidies for the project and that the government views the project purely from an economic perspective.

The Rajin-Khasan project is exempt from the South Korean sanctions imposed on North Korea in 2010 that ban inter-Korean business cooperation with the exception of the Kaesong Industrial Complex.

The economic sanctions called the “May 24 measure” were implemented following Pyongyang’s torpedoing of the Cheonan warship on March 26, 2010, which killed 46 South Korean sailors. North Korea denies responsibility for sinking the Cheonan warship, while South Korea has demanded that Pyongyang admit to its role in the incident.

The Rajin-Khasan project is a part of President Park Geun-hye’s Eurasia Initiative, first announced in October 2013 as a way to boost the regional economy through free trade and economic cooperation across Eurasia by reconnecting the railways that link the two Koreas, China and Russia, leading to Europe.

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]