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Thursday, 4 October, 2001, 06:26 GMT 07:26 UK
Koreas discuss troubled tourism link
Cruise ship
The cruises have been making heavy losses
By Caroline Gluck in Seoul

Officials from North and South Korea are holding formal talks to try to revive a troubled tourism project which had symbolised reconciliation efforts between the two countries.

Delegates from the two Koreas are meeting in the North Korean Diamond Mountain resort which first opened to South Korean tourists three years ago.

The venture is still the only opportunity for most South Koreans to visit the North as the two countries still remain technically at war.

The talks are the first in a series of exchanges between the two Koreas this month, following last month's ministerial meetings which ended a six-month boycott of official dialogue by the North.

Heavy losses

South Korean officials will be asking North Korea to open a road linking the two countries to help boost the landmark tourism project at Diamond Mountain, which is near the demilitarised zone separating the two countries. Until now the only way for tourists to get there has been by lengthy and costly cruise tours.

North Korean border guard
Tourism has helped break down decades of mistrust
But the South Korean company which runs the tours, Hyundai Asan, scaled back the project this year because it was losing hundreds of millions of dollars. The company had paid $12m a month to the North in return for exclusive rights to operate the project but it was forced to cut this back because of mounting losses and a drop in tourist numbers.

Opening a land route across the two countries' heavily fortified frontier, saving time and money, is expected to significantly boost the tourism venture. South Korean officials hope that an existing unpaved road linking the two countries could be opened by this year, with a wider expressway built next year.

The cruise tours to Mount Kumgang were seen as a breakthrough in relations between the two Koreas, and the project has been a key source of income for the impoverished North.

South Korean officials are hoping the North will also deliver on an earlier promise to designate the mountain area as a special tourist zone.

That would pave the way for investors to build facilities such as golf courses, ski resorts and other entertainment facilities which could help boost tourism in the communist country.

See also:

20 Jun 01 | Asia-Pacific
S Korea rescues joint tourism project
10 Apr 01 | Asia-Pacific
North Korea cruises cut back
12 Feb 00 | From Our Own Correspondent
North Korea's voyage of discovery
08 Aug 00 | Asia-Pacific
Hyundai takes cattle to N Korea
07 Feb 00 | Asia-Pacific
North Korea opens up to tourists
13 Sep 99 | Asia-Pacific
Analysis: The trouble with North Korea
13 Oct 98 | Asia-Pacific
Tourism plan for North Korea
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