May 23, 2001	atimes.com

The Koreas Hyundai reiterates Mt Kumgang tours in jeopardy SEOUL - Hyundai Asan President Kim Yoon-kyu and other top executives were to travel to North Korea on Tuesday to reach a "conclusive" settlement on the Mount Kumgang tour with their northern counterparts, company officials announced. The latest meeting is a follow-up to Hyundai Asan Chairman Chung Mong-hun's trip to Pyongyang last month. Chung is said to have told his North Korean counterparts that because of the mounting deficit, North Korea should lower the price of the tour program, authorize the opening of an overland route to cut costs and designate the scenic resort as a special tourist zone. At the time, officials for North Korea's Asia-Pacific Peace Committee, which oversees the tours, said that further discussions were needed to examine Hyundai's requests, and called for another meeting. Related to this, a Hyundai official said that unless North Korea cedes to the company's demands this time, the tours might have to be put on hold. As of this month, he said, Hyundai Asan was forced to halt operations of two of the four cruise ships that transport passengers to North Korea because there isn't enough customers. The official pointed out that if nothing concrete is reached, operations for the remaining two ships might be placed in jeopardy. Hyundai Merchant Marine Company Co, another Hyundai subsidiary, has been under pressure from creditors to desist from ferrying passengers to the North because the route was not turning a profit. The two sides have been trying to reach a compromise on the issue of cutting the amount of money Hyundai has to pay North Korea for operating the tours from the US$12 million per month agreed upon in November of 1998 to something more realistic. Hyundai has said that tacit understanding was reached, but no signed agreement has been forthcoming. Hyundai officials have expressed concern that the inability of North Korea to accept a mutually satisfactory understanding in the last several months is dampening expectations of a breakthrough this time as well. The company, however, stresses that since the project is more than an investment by a single company, if the North offers concessions, Hyundai would be able to talk with the government to receive assistance. The company has been requesting that the government authorize the running of a casino and duty free shop on the ships, or a floating hotel in North Korean waters, as a means to attract visitors. At the same time, some in the government have slowly began to push for the idea of creating a consortium of state-owned companies to take part in the tours alongside Hyundai with the firm said to be looking favorably upon this proposal. Meanwhile, opposition leader Lee Hoi-chang said on Tuesday that Hyundai's business projects in North Korea should come under scrutiny because they keep dragging down its aggravated business. Speaking at Konkuk University's graduate school of administration, Lee, president of the main opposition Grand National Party (GNP), called for the strict application of the law because of the Hyundai management's responsibility for its near bankruptcy. Warning about possible ramifications the Hyundai crisis will wreak on the national economy, Lee said the government should solve the problem before its tenure ends. "I urge President Kim Dae-jung and his government to deal with Hyundai's insolvent subsidiaries in accordance with market principles and the law,'' Lee said. The government should find out the exact amount of debts through due diligence on them and come up with a viable solution, including court receivership, a third party take-over or liquidation, he added. Citing the government's mishandling of the Daewoo and Hyundai crises, Lee criticized the government for maintaining collusive ties with the business sector more seriously than past governments. The government's populist approach has proven ineffective in dealing with chaebol, he said. (Asia Times Online/Asia Pulse)

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