S.Korea 'Tried to Invest $500 Million in N.Korean Hotel'

      November 02, 2012 12:28


      South Korea's intelligence agency apparently tried to invest US$500 million in a 105-story skyscraper hotel in Pyongyang during the Roh Moo-hyun administration in 2005.

      Reto Wittwer, the CEO of Kempinski Hotels & Resorts, during a seminar on Thursday said Ri Chol, North Korea's former ambassador to Switzerland, came to him and asked him to invest $500 million to help complete construction of the epically delayed Ryugyong Hotel in Pyongyang.

      Soon afterwards, a South Korean intelligence officer approached the CEO and offered to supply the $500 million provided Wittwer made it look as though he was investing the money, he added.

      Wittwer could not recall the exact date when Ri came to meet him but said Ri contacted him again four years later, and a Kempinski staffer remembered that as being in 2009. That would mean the approach came in 2005, during President Roh Moo-hyun's term in office.

      Construction for the Ryugyong Hotel began in August 1987 but was halted when the money ran out in May 1989.

      Wittwer said when he asked the South Korean intelligence officer why he was making the proposal, the officer told him a large, top-notch hotel being built in Pyongyang could help persuade North Korea to open up.

      The CEO said North Korea eventually learned that the money would be coming from South Korea, and representatives from the North and South met in Switzerland. Wittwer said he was at the meeting and explained that it was not North Korea's fault that the deal fell through. "The South Korean side pushed very hard," Wittwer recalled. "I don't know why they didn't approach it in a smarter way." He did not elaborate.

      Ko Young-koo was NIS chief in the first half of 2005 and was replaced by Kim Seung-kyu in the latter half of that year. Kim told the Chosun Ilbo he would have been briefed about such a project but had not heard about it. Ko could not be reached for comment. An NIS official said, "It is beyond my area of knowledge. I have no comment."

      Wittwer also said Ri talked about reunification between two Koreas based on the "one country, two systems" approach Beijing took with Hong Kong, since there realistically was a huge gap between the North and South and no other model was acceptable to Pyongyang.

      Meanwhile, Wittwer said he was several times approached by North Korean officials about investing in North Korea's Mt. Kumgang resort, but he refused because he felt it "would not be fair" to take away a project that South Korea’s Hyundai Asan had already invested in.

      The Ryugyong Hotel is now being developed by Egypt's Orascom, which has the mobile phone license in North Korea.

      Wittwer said the interiors of the second-floor lobby and ballroom on the third floor are almost complete and 150 rooms on the top floor will open first in the first half of next year. He added the Kempinski Group is investing no money in the hotel but participating "on the management side."

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