hankyoreh

North Korea has again suggested that South Korea construct a logistics complex on a site near the Gaeseong (Kaesong) Industrial Complex, located just north of the border that separates the two Koreas. Seoul is said to be considering the North’s request.

Putting together various reports, North Korea on September 20 suggested the construction of a logistics complex to assist companies doing business in the Gaesong Industrial Complex. Their proposed site is a 70,000 pyeong (231,400 sq. m.) ‘triangle’ between the Gaeseong Industrial Complex, Panmunjeom, and the office of Customs, Immigration and Quarantine (CIQ).

North Korea had requested the construction of the complex in January and February this year, but the government did not get around to replying until May, when it denied the request in a roundabout way, citing working-level difficulties. On September 20, North Korea again made its appeal. Seoul has not yet given an answer to Pyongyang’s second request.

Originally, the logistics center was to be placed within the Gaeseong complex, as per the Comprehensive Development Plan for Gaeseong prepared by Hyundai Asan. Experts think that North Korea wants to move the location outside the Gaeseong complex in order to make the proposed triangle of land, which is not arable, more appealing to investors from the South. Some experts say that North Korea wants to generate additional profit from the Gaeseong project by operating the logistics complex itself.

If the complex is build on the land suggested by North Korea, it may serve to ease military tensions between the two Koreas, as it is would mean cooperation close to the Military Demarcation Line. However, several disadvantages of the location include the difficulty of installing a railroad line there, as well as Seoul potentially balking at the fact that the area is governed by the laws of North Korea.

Companies operating in Gaeseong currently face no major logistical difficulties, as they are still producing on a small scale. However, experts anticipate the need for a logistics center will grow substantially by the middle of next year, when the first phase of company move-ins is scheduled to be completed.