World News

Seoul to send delegation to seized North Korea resort

SEOUL (Reuters) - South Korea will send government officials and business representatives to a North Korean mountain resort on Wednesday to discuss Pyongyang’s decision to strip a South Korean company of its contract to run tours to the area, an official said.

The North said this month it had revised a law overseeing the tourism project at Mount Kumgang on the east coast, effectively ending Hyundai Asan’s contract to exclusively run all cross-border tours to the resort.

The North wants to redevelop the resort, which has been shuttered since 2008 after Seoul suspended tours following the fatal shooting of a South Korean tourist there.

Mount Kumgang had been a lucrative source of hard currency for the destitute North under two liberal governments in the Seoul. At its peak, the Mount Kumgang tour programs attracted 300,000 tourists a year.

Hyundai Asan has invested tens of millions of dollars on the project, which once served as a symbol of cooperation between the rival states, since the 1990s.

Pyongyang said this month South Korean companies had until June 30 to visit Mount Kumgang “to discuss the matter of disposing of the frozen and seized properties.”

The Unification Ministry said on Monday the visiting delegation would consist of six government officials and six representatives from South Korean corporate investors in the Mount Kumgang complex, including Hyundai Asan.

“The upcoming visit is aimed at ascertaining the North’s positions related to the asset seizure and express our firm stance on protecting our people’s property rights,” said a ministry official.

The North last year seized or froze several South Korean assets at the resort, including two hotels, a duty free shop and a golf range as well as a reunion center for families separated since the Korean War in the 1950s.

Pyongyang has since taken steps to try to revitalize the zone that once served as a key cash cow for the North. At the start of the month, it announced a new policy aimed at developing the area into an “international” tourist spot.

The North’s state media said Mount Kumgang would be open to outside investors, including South Koreans. Pyongyang said it encouraged investors to build casinos, nightclubs and golf courses.

Relations between the two Koreas, still technically at war since their 1950-53 conflict ended with a ceasefire and not a peace treaty, deteriorated to their lowest level in years after two deadly attacks on the peninsula last year.

Both Koreas said at the start of the year they wanted to resolve their differences through dialogue, but this month the North said it was no longer interested in dealing with the South’s conservative President Lee Myung-bak.

Editing by Yoko Nishikawa