Uncertain Repayment of Mt. Keumgang Tour Loan

The Export-Import Bank of Korea (EIBK) judged that the repayment of the loan by the profit of the project is uncertain at its review of the loan application by the Korea National Tourism Organization. However, the Unification Ministry ignored the review and enforced the loan to KNTO. Such fact is revealed by the EIBK report on the `loan examination report on the Inter-Korean Cooperation Fund` to Rep. Kim Il-Yoon of the Grand National Party.

EIBK described in the general comment, ``since KNTO holds a quasi-monopolistic position on the tax-free business, the repayment capability seems good. However, the repayment only by the profit from the Mt. Keungang Tour project seems uncertain, considering its financial propriety.

EIBK also commented on the `financial propriety` that the estimated number of the tourists, four fees, and the general administration expenditure are uncertain.

KNTO and Hyundai Asan exaggerated the estimated numbers of the Mt. Keumgang Tourists without a concrete ground: from 244 thousands in 2002 and 442 thousands in 2003 to 1.774 million in 2009 and 1.951 million in 2010. According to the estimation, a quarter of the whole population will visit Mt. Keumgang in the following ten years.

In addition, the tour premium to the North is not `50 dollars per person` but `50 dollars per person per a day` and therefore, for a three day tour, each person must pay 150 dollars (195 thousands won).

Consequently, the tour fee per person for a three day tour including room and board will reach up to 450 dollars (588 thousands won), which is far from the promise of KNTO and Hyundai Asan for `low price tour.`

The plan for the Mt. Keungang project clarified the further payment of the delayed payment to the North (586 million dollars), classifying it as pending investment. When paying off the delayed payment, the Keumgang Tour project will suffer the deficit amounting up to 567.5 billion won even in 2010.

Rep. Kim asserted that, ``according to the business plan, the South will pay 78.8 percent (707.7 billion won) of the business profit for the following ten years and the gross payment to the North since 1998 will amount 1 trillion 932.3 million won. Therefore, the assertion that the business will go into the black from 2003 if the overland tour starts is absolutely false.``

issong@donga.com