Friday, May 8

Briefer:  James B. Foley



6       Statements by DPRK are unfortunate, not founded in reality

7       US is fulfilling its part of the agreed framework, and will continue
        to do so

7       Financing for KEDO project detailed

8       US has responsibility for providing heavy fuel oil

8       US willing to consider a global solution for funding in context of
        close congressional consultation

9       US has been assured that Japan and South Korea will meet KEDO


Q: Jim, on another subject, have you seen the statements coming out of
North Korea threatening to resume their nuclear weapons program unless
the fuel oil shipments, as promised, arrive?

FOLEY: Yes. Those statements are unfortunate, because they're not
founded on the reality of what the United States is doing in
implementing the agreed framework. We expect and trust that the North
Koreans will continue to implement their side of the agreement
enshrined in the agreed framework. The United States has fulfilled its
part of the agreed framework and will continue to do so.

We believe that the agreed framework is in the interests of all
parties and that its provisions will be carried out by all parties.
Construction of the light water reactors and deliveries of heavy fuel
oil are ongoing, and we continue to work with other members of KEDO
parties on financing. We, of course, closely monitor the agreed
framework. We are, until now, satisfied that the DPRK has indeed met
its obligations to the present.

Q: You're saying that the fuel oil shipments have arrived on schedule,
on time and in the right quantities?

FOLEY: Thus far they have. The fact of the matter is that the United
States is committed to providing a certain amount of fuel oil per
year. And we fully expect that by the end of this year we will have
provided the amount of heavy fuel that we have pledged to provide.

Q: Is it possible that some of those shipments would be delayed? Could
this have caused some of the concern on the part of the North Koreans
-- that by the end of the year it may all be there but if it arrives
in tranches later than they expect, might that raise concern?

FOLEY: Well, I'm not aware that there has been any delay in the
timetable of shipments. That may be the case; I just don't know about
it. What I am saying, though, is that we have a commitment. Thus far,
we have met the commitment, and we fully intend to do so. By the end
of the year, we intend to have reached the levels of heavy fuel oil
shipments that we pledged to make.

Certainly, there's been speculation publicly in the media about
financing for KEDO and for all the obligations under KEDO. Under the
agreed framework, we worked with South Korea and Japan, as you know,
to create KEDO -- the Korean Peninsula Energy Development Organization
-- in order to fund and oversee the light water reactor project. KEDO
has agreed on an estimated cost of $5.2 billion for the light water
reactor project funding, over the life of this roughly ten-year
project. Discussions among KEDO members on financing have been

The Republic of Korea has agreed to fund 70 percent of the
construction in Japan, a significant part of the project. KEDO has
funding for the current year, and discussions over details of the
funding for the rest of the life of the project continue.

Q: Is there concern - I mean, Japan and South Korea are a good deal
less flush today than they were in 1994. Is there concern that they
might not be able to afford these sums of money?

FOLEY: Well, Secretary Albright, of course, was recently in the
region, in both South Korea and Japan, and had discussions with
officials in both governments about KEDO financing. We have received
no indications on the part of either government that they will be
unable or unwilling to fulfill their commitments.

Q:  What percentage is South Korea up for - 17 or 70?

FOLEY:  7-0.

Q: 7-0. And does South Korea or Japan have any role in providing the
fuel oil, or is that a unilateral US obligation?

FOLEY: Well, the US, I would point out, has already contributed
approximately $86 million to KEDO for heavy fuel oil, and also for
KEDO administrative expenses. The US has also provided roughly $27
million for the canning of spent fuel rods.

I believe that the US is indeed responsible for the bulk of the
provision of heavy fuel oil. I'm not sure that that is a 100-percent
responsibility; but we have a large responsibility in that. On the
light water reactor construction, we have no plans ourselves to
participate in funding, in conformity with previous agreements.
However, the US has discussed with Japan and South Korea the
possibility of our making some contribution for safety-related
elements of the light water reactor project in some future year. If
this happens, it would only take place as part of a comprehensive
solution to KEDO's funding problems. And we would, of course, only
consider committing to fund light water reactor safety-related items
after close consultations with the Congress.

Q:  Is removal of the rods, is that going forward?

FOLEY:  My understanding is that it's almost complete.

Q: Do you have any complete idea of how much do you expect Japan or
South Korea to contribute in all the heavy oil --

FOLEY: I don't have the specific figures. Certainly, the percentages
that were committed to, though, at the time of the signing of the
agreed framework are a matter of record; and I just noted those.

Q:  How much do you figure the safety-related equipment will cost?

FOLEY: I don't have a figure on that. Of course, this is in the idea
stage. As I said, we would be willing to consider this as part of a
comprehensive solution to the funding of the light water reactors,
over the life of the project: that's number one. Number two, we would
have to sit down with Congress and reach agreement on this. So I'm not
in a position to talk about numbers at this point.

Q: But the reason this has come up is essentially because Japan and
South Korea are running into problems in coming up with their

FOLEY: Well, I think that we have received assurances that both Japan
and South Korea will meet their obligations. I see no indication
otherwise. There has been, I'm sure you're aware, a desire on their
part to see the United States participate in some way in the light
water reactor area. So we're looking creatively at this as a
possibility, as I said, within the context of a global solution to the

Q: And just one last one - did the Secretary, when she was in South
Korea and Japan, did she ask either country to participate in
contributing to the fuel oil endeavor?

FOLEY:  I'll have to take that question.

Q:  (Inaudible.)

FOLEY:  Thank you, Barry.

Q:  Can I ask you about - well, those of us who were there.

FOLEY:  Is that on the record or --

Q:  I can go on background.


But it wasn't volunteered; it came out really reluctantly because, as
you know, they're paying most of the bill for the reactor.