S. Korean firms cancel plans to build factories at Kaesong

SEOUL, Dec. 16 (Yonhap) -- Local companies have started to cancel plans to build
factories at the Kaesong industrial complex in North Korea as concerns mount
about deteriorating inter-Korean relations, an opposition lawmaker said Tuesday.

Rep. Chung Jung-bae's office said that since October, seven companies have
decided against setting up operations at the complex located just north of the
demilitarized zone.
"While two made the decision based on mounting losses in their businesses in the
South, the rest expressed deteriorating conditions under the Lee Myung-bak
administration as the main cause," an aide to Chung said.
The aide made the claim based on a report by the Kaesong Industrial District
Management Committee.
He added that there were cancellations in 2007, but overall reasons behind such
moves differed from those in the past few months.
The organization said the companies had secured building rights in June 2007 and
had been in various stages of planning or construction. Firms that cancel will
have to forfeit their down payments ranging from 17 million won (US$12,597) to 70
million won.
The North started expelling all non-essential South Korean personnel in the past
few weeks to protest what it calls the "confrontational" stance of the new
conservative government in Seoul.
There are 88 South Korean companies employing around 36,000 North Koreans at the
complex.
yonngong@yna.co.kr
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