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KOREAN PENINSULA

A Railway Line In Limbo

Construction of rail links between the rival Koreas moves ahead slowly. But politics and economics hold up dreams of a link to Europe

By Bertil Lintner/KHASAN, RUSSIA and DORASAN, SOUTH KOREA and Gordon Fairclough/SEOUL

IT IS DESIGNED TO BE a showpiece of former South Korean President Kim Dae Jung's "Sunshine policy" of rapprochement with the communist North: a railway line joining the two halves of the Korean peninsula and linking them to Russia and Europe. The railway would encourage trade between the rival Koreas, say its supporters. It would provide a faster and cheaper way for South Korean goods to get to European markets. And it would give Pyongyang and Moscow some badly needed cash in the form of fees on every container of cargo carried along their rail networks.

But the project, like all economic-cooperation ventures between the North and South, is in limbo these days. Construction is continuing--slowly--but with the nuclear stand-off between Pyongyang, Washington and Seoul showing no signs of a quick resolution, it is unclear when or how it can be completed.

"The political environment is the most important variable," says Chung Eun Sook, a senior research fellow at South Korea's Sejong Institute and an expert on the railway and relations between Russia and Korea. "No one is paying attention to rail connections right now. All the attention is on the nuclear problem." And apart from the political considerations, dreams of opening up a rail link from South Korea to Europe might not make economic sense at the moment because of the immense cost of rehabilitating North Korea's decrepit railway network and preparing it to handle a stream of freight trains carrying goods from the South.

South Korea completed construction last December of its part of the first line on the west side of the peninsula. This is eventually planned to connect Seoul to Pyongyang and thence to Western Europe via the 9,300-kilometre Trans-Siberian railway. The line stretches north from Seoul to Dorasan, the last stop in South Korea, and then continues to the mid-point of the Demilitarized Zone that has separated the North and South since the 1950-53 Korean War.

There, the rails join with tracks built by North Korea. The tracks laid by Pyongyang run north for about 2.5 kilometres, but then stop. A gap of about 13 kilometres separates the new line from North Korea's existing railway network. Since October, work crews in the North have been using heavy equipment and construction materials supplied by the South to complete the link, according to South Korea's Unification Ministry, which is monitoring the work.

At the other end of the line, in the small Russian border town of Khasan on the Tumen River, the only people waiting to cross into North Korea are construction workers returning home. Dressed in peaked caps and drab Mao suits with Kim Il Sung badges on their breast pockets, they carry their meagre belongings in old rice sacks marked World Food Programme--a reminder of the desperate living conditions across the border in their home country.

There is no cross-border trade in consumer goods, no cultural exchanges and no traffic other than the occasional train that rumbles across the iron bridge on the Tumen to pick up the migrant workers. Thousands of North Koreans work on construction sites and logging camps in Russia's Far East, handing over part of their wages to the Pyongyang regime.

The 240-kilometre line from Khasan joins the Trans-Siberian railway at a junction about 60 kilometres north of the port city of Vladivostok. But, to the disappointment of Russian officials, there are no goods trains coming from the other side of the Tumen, let alone from South Korea.

The Korean peninsula railway project is the brainchild of a Russian government eager to funnel cargo to the underused Trans-Siberian railway, claims Chung of the Sejong Institute. Ivan Stepanov, chief of Khasan's local administration, blames political problems for the slow pace of construction. "There used to be a lot of talk about the link, but it all stopped a few months ago when tension erupted between North Korea and the United States. We were all looking forward to the opening of the railway, but nothing came of it."

Sergei Krivets, head of transport in the Russian border district, sees it differently: "The main problem is North Korea's railway system. It's in an awful state, and would have to be completely rebuilt if millions of tonnes of South Korean goods are going to be transported via North Korea."

According to the Unification Ministry, the Russians estimate that trains travelling on North Korea's western line run at about 40 kilometres an hour, compared with an average of 80 kilometres an hour for freight trains in South Korea. On the North's eastern side, trains travel even more slowly. The North relies on electricity to help power its ageing locomotives. When the North's spotty power goes off, "trains get stranded," says Kang Yeon Seo, deputy director of the ministry's Intra-Korean Exchange and Cooperation Bureau.

Chung says that Russian experts, who originally estimated it would cost about $500 million to rehabilitate the North's rickety rail network, now think it could cost more than $3 billion. Russia has proposed an international consortium to cover the costs of the reconstruction. But no money is likely to be forthcoming until the nuclear crisis is resolved.

The Unification Ministry's Kang says that, while a total overhaul of North Korea's railway system would have to be considered in the long term to help move South Korea's huge volume of exports to Europe, it wouldn't be necessary to invest much to open a regular train service between North and South Korea--the most important short-term goal for Seoul, which wants to boost trade and contact with Pyongyang.

The Korean Transportation Institute says that a rail link would be a much faster, cheaper and more direct way to transport goods from South Korea to Europe. For example, sending a standard 20-foot container of cargo by ship from the port of Pusan to Berlin takes about 34 days and costs $1,540. To send the same container to Berlin by train--a distance of 12,350 kilometres against some 20,500 kilometres by sea--would take about 20 days and cost $1,280.

Optimists point out that trains have already travelled from Pyongyang to Europe. In August 2001, North Korean leader Kim Jong Il's 16-carriage private train crossed the Tumen and went all the way to Moscow and St. Petersburg. In August last year, Kim travelled by train to Khabarovsk.

To transport the North Korean leadership is one thing, but millions of tonnes of cargo quite another. And until the Trans-Siberian and North Korean railways are overhauled and upgraded, manufacturers are going to be reluctant to use them to move goods and insurers will be loath to cover the shipments. Cost comparisons "are meaningless if the railroad isn't safe and reliable," says Chung. In any event, she doesn't think Kim will ever allow the rail link to operate, because such openness to the outside world could threaten his regime.

No one in Khasan, apart from the local administrator, seems to be placing much confidence in the dream of a rail link to Europe, either. The locals seem more interested in a new, privately-owned supermarket. And a few kilometres away in Kraskino, they look to their other nearby neighbour, China, for economic opportunity. Investors have opened a casino in the town and gamblers from China will most probably be the main source of income for the area--not tariffs on goods coming from South Korea.

This article first appeared in the Far Eastern Economic Review, June 12, 2003

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