To: Kenneth E. Phillipps who wrote (448430 ) 8/26/2003 4:16:51 PM From: Hope Praytochange Read Replies (1) | Respond to of 769667 <<Most project costs are borne by South Korea and Japan. >>>>>> U.S. Says Consortium May Suspend Key N.Korea Project By REUTERS Filed at 3:42 p.m. ET WASHINGTON (Reuters) - An international consortium building a multibillion-dollar light-water nuclear power project in North Korea is expected to decide next month to formally suspend the venture, U.S. officials said on Tuesday, the eve of crucial talks with Pyongyang. Momentum has been building to suspend the project, which the United States and its allies in the Korean Peninsula Energy Development Organization agreed to fund as part of a 1994 nuclear agreement with the isolated communist regime. But taking a formal decision now could affect six-party talks that open on Wednesday in Beijing in an effort to persuade Pyongyang to abandon its nuclear ambitions. ``Our position is just tank the thing now'' permanently but Japan and South Korea prefer a suspension of the project and ``the likelihood is that KEDO will agree to a year's suspension,'' one U.S. official told Reuters. Another official, asked about a suspension decision, said: ``That's probably going to happen.'' A State Department spokesman said KEDO has not decided on a specific date for its next board meeting. But other officials said the board -- made up of the United States, South Korea, Japan and the European Union -- is expected to meet in September. There is some talk of trying to postpone the meeting, especially if the Beijing talks show promise, but that is unlikely, one official said. Under the 1994 deal, North Korea agreed to freeze a plutonium program to produce nuclear weapons fuel in return for a U.S. pledge to build two light-water nuclear reactors and annual deliveries of heavy fuel oil. BUSH OPPOSITION The light-water reactors, considered less prone to diversion for nuclear weapons use, were intended to provide the impoverished North with desperately needed energy. Most project costs are borne by South Korea and Japan. The Bush administration never liked the 1994 agreement, which it felt rewarded an untrustworthy regime for doing things it should have been doing anyway. The deal fell apart last October after Washington said Pyongyang had acknowledged a second, covert program to enrich uranium for bombmaking. Pyongyang has since ousted U.N. inspectors, pulled out of the nuclear Non-Proliferation Treaty and restarted its nuclear plant at Yongbyon. Some analysts say suspension of the light-water reactors would be seen as terminating the project and undermine chances of a peaceful resolution of the North Korea nuclear crisis. Others say it is a logical and overdue extension of U.S. policy since senior Bush officials have long made clear they have no intention of letting the North take control of a nuclear power reactor. ``A suspension is as good as North Korea is going to get from KEDO because whatever the outcome of the Beijing talks, the North is not going to be provided with light-water reactors. They have forfeited the right to anything nuclear,'' one official said. Another official said in addition to political decisions, technical requirements are forcing a halt to the project. A Japanese company due to install a critical drain tank has told the Japanese government it cannot go forward without indemnification insurance, which has not been provided, the official said. Without the tank, there will be a natural halt to the project. Also, while the administration has requested $3.5 million for KEDO in a supplemental spending bill, there is no money for it in the next U.S. budget, he said. Some U.S. officials, however, would like to keep KEDO alive as a vehicle to meet North Korea's needs with non-nuclear energy resources if talks resolve the nuclear crisis.