South Korea's minister in charge of inter-Korean affairs said on Monday the construction of a railway along the northern part of the east coast is the latest "Korean Peninsula New Deal" that could revitalize the economy battered by the COVID-19 pandemic.

Unification Minister Kim Yeon-chul made the remarks at a ceremony to renew Seoul's commitment to reconnecting inter-Korean railways on the second anniversary of President Moon Jae-in's first summit with North Korean leader Kim Jong-un.

The project to connect South Korea's northernmost station of Jejin to Gangneung along the east coast is part of the inter-Korean road and railway reconnection and modernization initiative agreed upon by the two leaders in 2018.

The initiative, along with other forms of inter-Korean cooperation, has been put on hold amid a prolonged impasse in denuclearization negotiations between the North and the United States.

Seoul recently designated the two-point-85-trillion-won project to build the 110-point-nine-kilometer track as an inter-Korean cooperative project, exempting it from a preliminary feasibility study.

The minister also reaffirmed Seoul's resolve to resume inter-Korean projects, including individual tours to the North, health cooperation and creating a peace zone along the Demilitarized Zone.