SEOUL, Aug 5 (Reuters) - South Korea will restart work on a railway section that could eventually link to North Korea's eastern city of Wonsan, the Unification Ministry said on Wednesday, reviving a project halted for a decade despite frozen relations with Pyongyang.
Unification Minister Chung Dong-young said in a presidential briefing the government would resume restoration of a disconnected section of the Gyeongwon Line near the Demilitarized Zone along the border with North Korea, a project launched in 2015 and suspended the following year.
A ministry press release said the railway, which begins in Seoul, could serve as a future connection to Wonsan, a key city on North Korea's eastern coast.
North Korea has poured resources into developing the Wonsan-Kalma coastal tourist zone, a sprawling beach resort that opened last year with capacity for about 20,000 visitors and which Kim has described as a model for expanding the country's tourism industry.
The Unification Ministry's announcement comes despite North Korea's move in 2024 to blow up road and rail links across the heavily fortified border as part of its drive to redefine South Korea as a hostile state.
The ministry said the railway project would improve access to peace and ecological tourism sites in the Demilitarized Zone and help spur economic activity in border regions.
South Korean President Lee Jae Myung acknowledged the difficulties of pursuing engagement with an unresponsive North that has repeatedly rebuffed his calls for rapprochement.
"It may feel like shouting into an echo-less void," Lee said at the briefing. "But peace and coexistence remain an important task. However difficult, we have to continue pursuing that policy."
The ministry also proposed expanding the use of the Inter-Korean Cooperation Fund, a government fund established to support exchanges and humanitarian projects involving North Korea, to a wider range of uses domestically.
With most cross-border programmes suspended since 2016 following North Korea's nuclear and missile tests, only around 2% to 3% of the fund has been spent annually over the past decade, Chung said.
Lee noted the fund had accumulated because there had been little opportunity to spend it, saying: "So the idea is to revise the enforcement decree and broaden its uses. That sounds reasonable."
Chung said the ministry would also seek regulatory changes allowing the fund to support border-area projects, peace economy initiatives, reunification activities and North Korea studies.
(Reporting by Kyu-seok ShimEditing by Ed Davies)
