North Korea billed 2 bln dollars for scrapped nuclear deal

SEOUL, Jan 16 (Reuters) An international consortium has demanded North Korea pay almost 2 billion dollars in compensation for a project to build two nuclear reactors that was scrapped after the United States accused Pyongyang of cheating on the deal.

''The KEDO board calculated the amount of 1.89 billion dollar and has made the demand to North Korea,'' a diplomatic source said by telephone today on condition of anonymity.

KEDO -- which stands for the Korean Peninsula Energy Development Organisation and is made up of South Korea, Japan, the United States and the European Union -- terminated the project last year after suspending the deal in 2002 amid suspicions the North was pursuing clandestine nuclear activities.

North Korea conducted its first nuclear test in October last year and now refers to itself as a nuclear state.

Under a 1994 agreement between Pyongyang and the United States based on freezing North Korea's nuclear weapons programme, the KEDO consortium worked to build two light-water reactors and supply heavy fuel oil until the reactors were functional.

KEDO said the project was suspended because of North Korea's failure to meet its commitments under the agreement, while North Korea blames the United States for breaking the deal.

South Korea had spent 1.1 billion dollar on the project, the largest portion of the bill.

REUTERS SP RN1738