SEOUL: Orascom has resumed construction work on a large luxury hotel in the North Korean capital after being suspended for nearly 20 years due to funding problems, South Korean analysts said Wednesday.

Construction of the 105-storey Ryugyong Hotel began in 1987, using French financing and technology. The 330-meter venue was billed for completion in 1992 as the world's tallest hotel.

But North Korea suspended construction two years later with only 60 percent of the site completed, due to lack of funds and rumors of structural deficiencies.

Work has now restarted in partnership with Egyptian group Orascom, which has business ventures in the communist country, said a newsletter from the Seoul-based think-tank, the Institute for Far Eastern Studies.

Yonhap news agency has also quoted a business source as saying construction had resumed in April.

The magazine Esquire has described the hotel in Pyongyang as "some twisted North Korean version of Cinderella's castle."

"Even by communist standards, the 3,000-room hotel is hideously ugly, a series of three grey 328-foot long concrete wings shaped into a steep pyramid," the magazine said in a report earlier this year.

Orascom won the right in January to provide a mobile phone service in North Korea, and has said it intends to provide coverage to Pyongyang and most other major cities during the first year of operations in the country of 23 million.

The extent of cell phone use in North Korea is unclear.

Orascom has succeeded in making its first mobile call in preparation for the full launch of its service later this year, according to an earlier Yonhap report. It also has an interest in a cement plant. –AFP