By Jane Han
Staff Reporter

Starting the end of this year, South Korean goods will reach Europe via North Korea and Russia's railway in less than half the time it takes now by sea.

The Ministry of Land, Transport and Maritime Affairs said Wednesday that the South Korean government recently agreed with Russia's rail monopoly, Russian Railways, to set up a joint venture in June to renovate the dilapidated 54-kilometer rail stretch linking the North Korean city of Najin and Russia's Khasan.

The restoration of the link will allow South Korean freight shipments, taken to North Korea by sea, to be transported further to Europe via Russia on the Trans-Siberian Railroad.

The Trans-Korean Railroad connecting Busan and Najin cannot be used because the two Koreas have yet to work out the guidelines for use.

The latest move follows a deal made between North Korea and Russia last Thursday to launch a trans-Korean rail modernization program, in which Pyongyang and Moscow will control 30 percent and 70 percent of the venture, respectively.

Russian authorities said last week that the project will attract investors and invite contractors to design and build operations.

As direct negotiations with North Korea are difficult, the ministry said Seoul and Moscow decided to make a 4:6 split of Russia's 70 percent share in the renovation deal.

South Korea's state-run KORAIL, Glovis and Pantos Logistics are among those set to participate in the project as a consortium. An estimated $150 million will be required for the project, of which local companies will significantly shoulder.

Government officials said a pilot Busan-Najin-Khasan run may be possible as early as August.

Currently, it takes about 40 days to transport goods from domestic ports to Europe by water, but the new railway link is expected to cut the time to 17 days.

jhan@koreatimes.co.kr