Subscribe
E-Paper
With South Korea and North Korea likely heading toward peace and economic cooperation, connecting railways is likely to be the first move. Analysts explain that South Korea, which has been virtually an island, will see new doors opening up by being connected to the huge Eurasian continent.
Following President Moon Jae-in and North Korean leader Kim Jong-un's announcement that they will take practical steps to connect and modernize the Donghae and Gyeongui train lines and roads, stocks related to railways soared to their daily limit on the Seoul bourse, Monday. They included train manufacturer Hyundai Rotem, railway signaling and control system developer Daea TI, and railroad inspection equipment producer Eco Maister.
"Investment related with the bilateral economic cooperation would start with SOCs such as roads, railways, ports and electric power plants," said Kim Hyo-jin, an analyst at SK Securities.
"The cost for major infrastructure development projects in North Korea would be as much as 68 trillion won ($64 billion), and 76 percent of it is concentrated on roads and railways," she said.
The two Koreas can freely cooperate on railway connections as public infrastructure construction is not subject to the U.N. sanctions on North Korea. Amid the peaceful mood, the country's railway operator KORAIL as well as the Korea Expressway Corp. set up taskforces to prepare such plans.
Before Korea was divided in two, the Gyeongui Line ran from Seoul to Shinuiju, North Korea's border town with China, while the Donghae Line linked the southwestern port of Busan and Wonsan in the north. The Gyeongui Line was restored amid the peaceful mood back in 2003, with freight trains operating 222 times between 2007 and 2008. However, it stopped operation following North Korea's shooting of a South Korean tourist at Mount Geumgang in 2008. As for the Donghae Line, the railway between Gangneung and Jejin should be connected, which is estimated to cost 2.4 trillion won, according to the land ministry.
Economic roadmap
The railways bolster the New Economic Roadmap for the Korean Peninsula, an initiative of President Moon Jae-in aimed at simultaneously developing the peninsula's coasts as well as the demilitarized zone (DMZ). It aims at establishing an economic cooperation belt along the west coast, while the east coast will see an energy and resources belt that may be extended to Russia's gas and oil supply. The DMZ will harbor a tourism belt that reaches to Mount Geumgang.
Relinking the railway and roads is essential to develop rich mineral resources in North Korea, whose potential value is estimated to be up to 4,000 trillion won.
 |
Before division, Korea was linked to the continent by rail. Koreans would travel to China or Russia by taking trains at Seoul Station.
"By linking the logistics networks between South and North, Korea will make a new leap toward a continental economy from a de facto island. It will be a new growth momentum for the economies of both countries," said Lee Hae-jeong, a senior researcher at Hyundai Research Institute.
The Korea Railroad Research Institute (KRRI) expects R&D efforts to connect railways between the two Koreas as well as with transcontinental lines will gain momentum.
"By linking the railways, the Korean Peninsula would be developed into an open territory from a closed territory," KRRI President Na Hee-seung noted.
"We plan to do our best for realization of the New Economic Roadmap and New Northern Policy."
The New Northern Policy refers to the administration's economic roadmap to bolster cooperation with Eurasian countries.
He estimated in a report it would take around 4 trillion won to upgrade the Gyeongui and Donghae lines. The good news is there is little hindrance in the construction of railways and roads there as there is little problem having to compensate landowners in North Korea.
