New start needed for North Korea reactors, South says

SEOUL - A frozen project to give North Korea nuclear reactors should be scrapped to draw a line between that and any new deal to give such plants to Pyongyang if it gives up its atomic weapons, South Korea's foreign minister said.

In a weekend interview with Reuters, Ban Ki-moon said it was possible the project site -- where work has been suspended since late 2002 -- could be used if the North fulfils its part of a joint statement agreed at six-country arms talks last month.

An international consortium was founded a decade ago to implement a 1994 nuclear deal under which the North agreed to halt its nuclear program in return for two light-water nuclear power plants at Sinpo in North Korea and other fuel supplies.

But the project run by KEDO -- short for the Korean Peninsula Energy Development Organization -- has been suspended since late 2002 after Washington accused the North of cheating on the deal.

"Basically we have to make some distinction between the light-water reactors in Sinpo and this," said Ban, referring to the six-party joint statement agreed in Beijing last month at talks intended to rein in the North's nuclear ambitions again.

In that statement, China, Japan, Russia, South Korea and the United States promised to consider giving the North light-water plants if it gives up its nuclear aims.

The six countries meet again in November to start negotiating the timing and sequencing of their outline agreement.

At Sinpo, 120 people are still guarding the site and maintaining work already done, a KEDO source said. Large parts of the reactor container building and the shell of one of two planned reactors have been completed.

Many options

Although seemingly esoteric, the fate of the suspended project is significant. South Korea has already spent $1.1 billion on it, and the site is about a third complete. The whole 1994 Agreed Framework deal was worth $4.5 billion.

The South has also offered North Korea electricity from its own power grid as part of a new deal. That is one reason why Seoul now wants to scrap the KEDO project, but not immediately.

"As far as Korea is concerned, even though we made an agreement for the termination of the KEDO project, I think KEDO as an entity should exist at least for a certain period of time, for example, say two years," said Ban.

He said this would allow administrative, legal, contractual and bureaucratic matters to be wound up.

Asked whether the existing Sinpo site could be used for any new deal on light-water reactors rather than waste the work already done, Ban said: "That's one of the possibilities, but I can't say anything at this point."

The board of KEDO met late last month at its New York headquarters but did not decide whether to kill the organization and project altogether or further suspend building work. The deadline to decide about the reactor site is the end of November.

Washington wants to end the project. The KEDO reactors would be of US design. Others in the consortium, notably Japan and South Korea, were to pay for them.

Some media reports have said Russia might provide light-water reactors in any new deal, but Ban said there were many options.

"It's too early for me to say anything."

(additional reporting by Paul Holmes, David Schlesinger, Lee Suwan and Jack Kim in Seoul and Paul Eckert in Washington)

- REUTERS