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Schiller Institute/ICLC 
Bad Schwalbach Conference

The Role of the Trans-Korean Railway In N.E. Asia
Transportation Corridors

Dr. Ahn Byung-min
March 21-23, 2003

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Dr. Ahn Byung-min, Director of the Department of Rail Transportation Research of the Korea Transport Institute (KOTI), gave this presentation to the Feb. 7, 2003 Tokyo Conference of the Economic Research Institute for Northeast Asia (ERINA), in Niigata, Japan; and submitted it to the Schiller Institute Bad Schwalbach conference on March 22. It was translated into English by ERINA.|

Recently, the connection project of railroad networks between the R.O.K. [South Korean] and the D.P.R.K. [North Korea] has emerged as a major variable amid the changes in the international environment surrounding the Korean Peninsula. This project has contributed to improvement of relations and stable peace between the D.P.R.K. and the R.O.K. and is a new model of economic cooperation in the Northeast Asian region.

The D.P.R.K. and Russia had not held a summit meeting since 1984. However, since the establishment of the Putin government, summit meetings between both countries have been organized three times. In the background of this rapid improvement of relations, there was probably an interest in mutual profits from a connection of the Trans-Korean Railway to the Trans-Siberian Railway. The D.P.R.K. has pushed the Kyong-ui (Seoul-Shinuiju) Line restoration project with the R.O.K. government, and also has discussed an issue of running through services, across the Russia-D.P.R.K. border, with the Russian government, based on the assumption of constructing a Trans-Korean Railway.

I will now talk about the positioning and role of Trans-Korean Railway in the Northeast Asian transportation corridors, from the perspective of changes in the environment surrounding the Korean Peninsula due to such an international railway network construction project.

Current State of the Trans-Korean Railway Project

1. Republic of Korea: In September 2002, the R.O.K. started the construction at the demilitarized zone, which was the most difficult issue in the project. Landmine removal work at the R.O.K.-controlled area of 1.8 kilometers of the west track and 2.0 kilometers of the east track was completed in December 2002. In January 2003 a working-level negotiation for linking the Kyong-ui Line was held, reaching an agreement to provide the D.P.R.K. with materials and equipment required for railroad connection for the D.P.R.K. Even in the discussions regarding train operations, there was a match of opinions in many areas. Also, military officials of both the South and North sides agreed on a Tentative Agreement for military security related to passing through the R.O.K./D.P.R.K.-controlled regions in the area of the East Sea and the West Seacoast, to ensure military security when passing the demilitarized zone. Recently, the R.O.K. government is considering joining the Organization for Railways Cooperation (OSJD), an international railroad cooperation agency, on the premise of completing the Trans-Korean Railway. It is expected that membership in an international agency that enjoys the participation of 27 countries using the EURASIA international railway network, will provide the impetus to strengthen the role of the Trans-Korean Railway.

2. Democratic People's Republic of Korea: Lately, the D.P.R.K. has made efforts to improve railway facilities. According to its 2002 New Year joint editorial, the railway and transportation sector has been set as one of the main battlefronts for economic construction. In fact, this tendency can be clearly observed, as General Secretary Kim Jong-il's first on-the-site guidance in 2002 was to an electric locomotives plant. In 2002, the D.P.R.K. implemented a joint survey with Russian railway facilities in the eastern Korean Peninsula, from Wonsan up to the border with the R.O.K., and started foundation work for the connection to the Trans-Siberian Railway. Also, the D.P.R.K. agreed with the R.O.K. to connect railways on both the eastern and western sides of the Korean Peninsula. At present, the D.P.R.K.'s work for landmine removal on the western line (Kyong-ui line) was completed in the D.P.R.K.-controlled area (2 kilometers) of the demilitarized zone (4 km). Further, an agreement for train operations has been studied, and both sides will exchange the agreement shortly.

Positioning and Role of Trans-Korean Railway

The western route of the Korean Peninsula is a main corridor running through populated areas such as Seoul, Kaesong, Pyongyang, and Shinuiju. Also, it is an international route leading to China's three Northeastern provinces. At the same time, it is an industrial route, passing the Shinuiju Special Administrative Region and Pyongyang Industrial Area, which have been selected as nodes of development by the D.P.R.K. government. Trade volume between the D.P.R.K. and the R.O.K. until November 2002 was approximately $560 million. Exports from the R.O.K. stood at $310 million, and the main items were agricultural products, fertilizer, and steel. Exports from the D.P.R.K. stood at $240 million, and the main items were textile and marine products.

Of this inter-Korean trade, the total amount of commercial trade was $340 million, while non-commercial trade (material for the KEDO project, and Mt. Kumgang tourism, etc.) accounted for about $300 million. A large portion of the trade was carried out by ship because road and train were not available. A total of approximately 1.09 million tons of cargo was transported on the 1,827 shipments that took place in 2002 between the D.P.R.K. and the R.O.K. However, shipping costs between Inchon and Nampo are $720 per TEU, which is more than twice the international level (shipping cost from Inchon to Tianjin is $300 per TEU).

Currently, as for example, for an R.O.K. company running processing-on-commission trade for textiles with the D.P.R.K., transportation costs account for 40% of its production cost, or 15% of sales price. This fact reveals that there are many problems in inter-Korean trade, as represented by transportation and such problems restricting trade expansion. The connection of the western route of the Korean Peninsula shall provide the opportunity to establish a new model of local cooperation between the D.P.R.K. and the R.O.K. Further, it will be positioned as the main corridor in the transportation market of the Pan Yellow Sea economic region, including the Northeastern region of China and Mongolia.

On the eastern route of the Korean Peninsula, there is a rupture of 298 km on the R.O.K. side. It may take at least 10 years or more work to get the entire route connected. Actually, according to the R.O.K.'s National Plan for Trunk Lines of Transportation, this route was supposed to be completed in 2020. However, due to last year's connection agreement between the R.O.K. and the D.P.R.K., the expected completion period has been shortened by approximately 10 years. The R.O.K. government is planning to give priority to the construction of the railway from Onjongri, a border station on the D.P.R.K. side, to Taejin, a border station on the R.O.K. side, before the completion of all sections on this route. This is a length of 27 km (North section: 18 km; South section: 9 km), and the work will take two to three years. The idea behind the railway route construction between Onjongri and Taejin is that some of the cargo from Pusan Port in the R.O.K. will be transported by truck to Taejin station, from where the railway can be used. In otherwords, it is a provisional alternative plan until the eastern route is completed.

The eastern route shall be economical in the long term, with consideration to the shortage of railway transportation capacity between Seoul and Pusan, the cores of the R.O.K.'s economy and industry. Possibly this route shall play the role of being a corridor to transport agricultural products and steel between the D.P.R.K. and the R.O.K. It will probably be utilized as the main corridor for the East Sea/Japan Sea economic region, linking the Russian Far East, China's Jilin and Heilongjiang Provinces, and Japan's western region. In the long term, it is expected that it will play the role as an international land-bridge, connecting Northeast Asia, the Russian inland area, and Europe.

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