South Korea’s government is examining ways to provide emergency relief to firms with factories at the Gaeseong industrial complex, where production has been halted for the past two weeks, an official source said Tuesday.

The Unification Ministry official said Seoul’s stance on the Gaeseong issue remains unchanged and it has consistently urged the North to lift its entry ban on South Korean workers and materials going to the border town, and to rescind its decision to pull out all of its 53,000 laborers.

The North barred traffic into Gaeseong on April 3 by claiming Seoul insulted the dignity of the communist country, and followed this the week after by ordering its laborers hired by the 123 South Korean companies not to report to work, which then halted all operations.

“Since the North has not heeded our request to normalize operations, the government has been in the process of trying to assist firms that have been affected,” said the official, requesting anonymity.

He said working level officials from the unification, finance, commerce and labor ministries as well as the Financial Services Commission, the Small and Medium Business Administration and tax office have held meetings to review requests made by Gaeseong companies and check what actions could be taken.

“Seoul has been informed of the damages being caused by the North’s actions and is examining measures that can be taken immediately and those requiring more time to implement,” he said.

He hinted that request to declare Gaeseong a “special disaster zone” is being examined by the Ministry of Security and Public Administration.

The official said that while conditions are dire, Seoul and the affected companies are not thinking of writing off assets at Gaeseong as being lost, but are focusing on reducing fallouts from work stoppages, the cancellation of business contracts with buyers and the liquidity crunch felt by companies.

“Some banks such as Woori and the Industrial Bank of Korea have already provided 18 billion won ($16 million) to 33 companies to help with liquidity shortfalls, with other financial institutions moving to roll over on debt payment schedules, and provide fresh loans at preferential rates,” he pointed out.

Gaeseong companies have also been given waivers on rent and public utility payment obligations, with the latter worth about 2 billion won, while the tax office plans to hold off on collecting value added taxes.

“The government’s plan is to steadily update what it can do to help Gaeseong companies, without triggering opposition from companies that have factories in South Korea and are facing similar problems,” he said.

The official, meanwhile, said that Gaeseong companies sent a petition to the General Bureau for the Special Zone Development Guidance that manages the border town for the North, asking authorities to reconsider its actions and normalize operations.

The complex that first churned out products in late 2004 remains the only economic link between the two countries after Seoul cut off all ties following the sinking of one of its warships in March 2010.

The ministry in charge of inter-Korean relations, meanwhile, said there are now 180 South Koreans at Gaeseong, with eight having returned over the demilitarized zone that separates the two countries just before noon. The numbers are much smaller than the 850 that usually stay at Gaeseong. (Yonhap News)