THE PLANNED summit between the leaders of North and South Korea could lead to the re-opening of inter-Korean road and rail links, said Seoul government officials.South Korea's Ministry of Construction and Transportation said it is prepared to go ahead with the construction of its US$7.27 billion inter-Korean road infrastructure project, linking the 23,000 kilometre-long main road of North Korea with South Korea's 84,948 km-long highway.
In South Korea, railroad transport accounts for only 20 per cent of its total cargo flow, versus 90 per cent of total cargo transported by railroad in North Korea, said Jeon Kyong-hoon, a research fellow at the Korea Transport Institute (KOTI).
"South Korea depends too little on rail, and North Korea depends too much on rail - the optimal rail ratio is believed to be 37 per cent," said Jeon Kyong-hoon.
The first among the inter-Korean railroad projects will be the reconstruction of the 24.5 km of rail stretching from South Korea's northeast city, Cholwon, in Kangwon Province, to the Military Demarcation Line (DMZ).
To this end, the South Korean government has already allocated $900 million in funds from its the 2001 budget for the purchase of land for the Cholwon-DMZ railroad.
If the plans go smoothly, it will connect the route of Cholwon-DMZ-Kisong near Mt. Kumgang for a total distance of 75.3 km. Ministry sources estimate the total funds to rebuild the railroad to Mt. Kumgang from the DMZ at $39.7m.
But a key issue is how to raise the funds necessary, said the ministry spokesman.
"South Korea cannot afford it all alone, and it all depends on North Korea's decision."
He suggested that one possible method is having the International Bank of Reconstruction and Development act as a project financier in the North, with South Korean companies involved as project operators.
"That was the way that South Korea successfully achieved SOC development during the 1960s," he added.
The Seoul government plans to privatise the state Korean National Railroad (KNR), currently groaning under loans worth $1.18bn.
In South Korea, railroad spending has long been a low priority, said experts. In 1998, Seoul spent $7.1bn in the transportation sector, 67 per cent of which went to roads and 11 per cent of which went to railroads.
Railways have increased in length by only 0.77 per cent annually during the past two decades, versus a 2.8 per cent growth in road length over the same period, said Jie Kwang-shik, director general of transport and logistics at the Ministry of Construction and Transportation.
This year the ministry plans to spend $1.91bn on railroad projects, including a 57.2-km test section of the Seoul-Pusan high-speed railway, and double-tracked railways linking Seoul and Pusan.
Meanwhile, the Korea High Speed Rail Construction Authority announced that $1.3bn in bonds will be issued to finance construction of the Seoul-Pusan high-speed railway that is scheduled to be operational in 2004.
"A key task is to secure an efficient link between the existing railroad and the new high-speed railway," said Choi Jong-Ok, who leads the KNR's high-speed rail team.