Koreas herald joint industrial park

Construction of the complex will begin next year

A ground breaking ceremony has been held in North Korea for an inter-Korean economic project which both sides hope will aid ties.

The proposed complex at Kaesong, 70 km (45 miles) north of Seoul, is designed to marry North Korean cheap labour with South Korean technical expertise.

It is one of many inter-Korean projects which were agreed at an historic meeting between the two sides in 2000, but which have been delayed by tensions over the North's suspected nuclear weapons programme.

"This symbolises the beginning of active economic co-operation between the two Koreas," reports quoted Hyundai Chairman Chung Mong-hun as telling 120 South Korean delegates and 200 North Korean officials gathered for the ceremony.

Ri Jong-hyok, vice-chairman of North Korea's Asia-Pacific Peace Committee, said the industrial park's value would not only be economic.

"This project reflects the whole nation's wish for reunification," he said.

North Korea hopes the park will boost its lagging economy

Construction of the 16,337-acre (6,609-hectare) estate is not set to begin until next year.

The first phase will provide a $180m complex to house some 300 textile, shoe and leather plants.

South Korea's Hyundai conglomerate and Seoul's state-run land developer Koland are spearheading the project.

Meanwhile, another industrial project in North Korea is under scrutiny.

The head of an international consortium providing North Korea with light-water nuclear reactors, Charles Kartman, has met the South Korean foreign minister, Yon Young-kwan, for talks in Seoul on the future of the project.

Washington is reported to want to suspend the project to put pressure on Pyongyang to abandon its controversial nuclear agenda, that includes developing a nuclear weapons capability.

Japan has called for more dialogue on the issue, while South Korea has consistently supported continued engagement with North Korea.

The South's economic dealings with the North have been tainted by a report by an independent inquiry this week that the previous South Korean Government secretly paid the North $100m, before the 2000 summit.