South and North Korean officials announced Saturday that they had reached an agreement to open cross-border roads and make test runs on two railways across their heavily fortified frontier in coming months.
Under the accord, which followed a four-day meeting of economic officials in the North Korean capital, the two sides will open two roads, one across the western part of the inter-Korean border and the other in the east.
They will also test-run two railways running alongside the roads, a media pool report from Pyongyang said.
"The South and North ... shall test run on the linked sections of the railways in October 2004," said a joint statement. "In addition, the two sides will open the Seoul-Sinuiju road and the Eastern road no later than in October," it said.
The two sides also agreed to set up by the end of June a joint agency to run an industrial park being built in North Korea's Kaesong city near the border and appoint a South Korean to oversee it.
The sprawling park, mainly housing hundreds of South Korean garment and other labor-intensive plants, will be connected to the western cross-border transport links.
Electricity for the complex will come from the South after the state-run Korea Electric Power Corp. completes building powerlines by late September.
Production at the complex will start by the end of this year, the agreement said.
South and North Korean officials at the meeting also said they needed to speed up work on a demonstration complex in the park to ensure that South Korean firms move in and begin production, officials from Seoul said.
Fifteen firms out of 136 applicants seeking to operate in the Kaesong complex have been selected, including watch maker Romanson.
"The South, out of brotherly love and the principle of mutual help, will provide the North with 400,000 tonnes of rice loan," the agreement said.
The breakthrough is expected to expand co-operation and contribute to stability on the peninsula, South Korea's Yonhap news agency said.
The accord at the Pyongyang economic talks followed a breakthrough Friday in separate military talks in a South Korean resort where the two sides agreed to ease tension along the world's last Cold War frontier.