S. Korea to resume factory construction in Kaesong industrial park

SEOUL (Yonhap) - In a sign of South Korea's promised flexibility in its dealings with its northern neighbor, the government will allow local companies to resume stalled construction of facilities in an inter-Korean industrial complex in North Korea, an official said Tuesday.
The announcement by the Unification Ministry comes after South Korean leaders recently called for more flexible policies toward the North, despite sanctions imposed after the sinking of a South Korean warship in March, 2010.
The North denied involvement in the sinking that killed 46 sailors but, in a separate incident, shelled a South Korean border island last November, killing four more South Koreans.
South Korea has continued to maintain the joint industrial complex in the North's western border city of Kaesong, but its sanctions banned new investment and forced its companies to halt construction of factories in the complex.
South Korea will allow seven companies to resume stalled construction in the complex, said Unification Ministry spokesman Chun Hae-sung.
The complex has become the last-remaining symbol of inter-Korean rapprochement, which had boomed following the 2000 summit between the leaders of the two Koreas.
More than 47,000 North Koreans work at about 120 South Korean firms operating in the industrial zone to produce clothes, utensils, watches and other goods. The project serves as a key legitimate cash cow for the impoverished communist country.
South Korea also plans to build a fire station and emergency medical facilities in the North's economic enclave by next year, Chun said.
Separately, South Korea is scheduled to hold a series of meetings with North Korea to discuss repairing a road for North Korean commuters to the complex.
South Korea also plans to expand its commuter bus service for North Korean workers as part of efforts to help relieve a shortage of workers.