of the United States.

To make the building capable of meeting DoD's needs for the next 50 years, the current inadequacies must be addressed. Most of the building's systems have deteriorated beyond the point of economical repair and require total replacement. None of the major building support systems have ever been replaced or significantly upgraded.

The electrical, heating, ventilation, air conditioning and plumbing systems must be replaced in order to ensure these services continue to be provided to the building as well as bring them up to modern

standards. The windows must be replaced and the exterior surfaces repaired. Some other examples of problems areas are:

The building does not meet current fire and life safety codes.

Asbestos is found extensively in the plaster, floor tiles and the heating and air conditioning system.

The building does not meet the accessibility standards for disabled individuals.

Basement floor slabs have settled as much as 12 inches.

The electrical distribution system is outdated, overloaded and deteriorating rapidly, resulting in daily power outages to areas of the building that are heavily computerized.

The piping throughout the plumbing system has deteriorated to the point where it can be penetrated by pointed objects (and)

Of the five original boilers, only one remains operational, and several of the chillers are also no longer operational, thereby requiring the leasing of boilers and chillers in order to meet heating and cooling needs of the Pentagon. Now, I will describe how we plan to renovate the Pentagon and correct these conditions.

Logistics Support Extension

The renovation will be accomplished in eight phases. The first phase provides for the construction of a new heating and refrigeration plant. The design of the new plant has been completed and approved by the Commission of Fine Arts and the National Capital Planning Commission. Construction of the new plant is scheduled to start this summer and be completed in the summer of 1995. The second phase of the renovation program is also the cornerstone of the entire effort as it provides for the construction of a 500,000-square-foot logistics support extension. The extension is approaching the 35 percent design milestone and is scheduled for construction award later this year.

This phase is critical to the successful renovation of the Pentagon. It will allow for improved security and safety by centralizing all delivery functions and eliminate some 200 daily penetrations of the perimeter security. It will also improve traffic flow and eliminate the conflicts between pedestrians, delivery vehicles, buses and private vehicles at the most heavily traveled portion of the building.

This building will provide space for those functions critical to the operation of the building during the renovation. These include the various shops (electrical, plumbing, air conditioning, etc.), the defense printing plant, medical clinics, loading docks, defense mail facility and the new digital telephone switch to support the modernization of the Defense Telecommunications Network within the NCR. The construction of the LSE also reduces the amount of swing space needed during the renovation by approximately 420,000 square feet. Reducing the amount of swing

space by this amount will result in a cost avoidance of at least $90 million over the seven-year period that the swing space will be needed.

This cost avoidance does not include any of the special requirements that would have to be built out in the commercially leased space. When the costs associated with a renovation plan that does not include a LSE are compared to the proposed concept with the LSE, not only are there substantial benefits to security, safety and an improved renovation schedule, but the renovation concept with the LSE reduces the overall renovation cost. The LSE concept design, which blends into the current landscape, has been approved by the Commission of Fine Arts and the National Capital Planning Commission.

During Phase III, basement area structural deficiencies will be corrected, mezzanine space in the two-story-high basement area will be expanded and built out, and improvements made to the site, such as repairs to the bridges, paving, walkways and roadways, thereby improving both security and safety. Phase III will be started in fiscal 1994.

Five Wedges

Phase IV through VIII consist of dividing the Pentagon building into five wedges and accomplishing the needed work in each wedge in sequential order. The work in the first wedge (Phase IV), will start in fiscal 1995, and the work in the fifth and last wedge (Phase VIII) will start in fiscal 1999.

With the full cooperation of all the committees of Congress, we are using an innovative process to pay for the Pentagon renovation and continue to operate it at the same level.

The transfer of ownership from GSA to the secretary of defense means DoD will return more than $1 billion in rent payments over a 13-year period that would have gone to GSA. These savings will be used to fund the renovation of the Pentagon.

The legislation that transferred the Pentagon to the secretary of defense also directed the establishment of the Pentagon Reservation Maintenance Revolving Fund.

Based on rates established by the secretary of defense for space and services provided to tenants of the Pentagon reservation, funds are collected and deposited into the maintenance fund. These funds are then available, until expended, for real property management, day-today operations, protection, construction and other related activities associated with the Pentagon reservation.

In the implementation of the maintenance fund, DoD has followed the guidance provided in the report language by various congressional committees. Accordingly, the fund has been designed to operate on a break even basis over the long term. In fiscal 1992, Congress appropriated $60 million into the maintenance fund for the construction of the new heating and refrigeration plant. In the future, all costs for renovation and operation of the Pentagon will be paid out of rent charged to the tenants.

As you know, the changing world situations are bringing about a reduction in the resources devoted to national defense. As part of our continuing effort to

"The Pentagon building is approaching the 50th anniversary of its completion. Regardless of the shape that DoD's force structure takes on in the future, the Pentagon will remain the headquarters for the planning and execution of the defense strategies of the United States."

streamline management and operate more efficiently with reduced resource levels, the deputy secretary of defense has directed a study be conducted to determine which activities should remain in the National Capital Region. This study is divided into two phases.

In Phase I, an analysis of DoD activities in the NCR will be conducted to determine whether they need to remain in the NCR, based on their mission, responsibilities and functions. A list of those activities which could be relocated without an adverse impact will be forwarded to the deputy secretary for his consideration.

In Phase II, an economic analysis

of selected activities will be performed to determine which relocations would be cost effective.

In accordance with the Base Closure and Realignment Act of 1988, the study will be integrated into the 1993 base closure process and will become part of DoD's overall closure and realignment recommendations, with an expected submittal date to Congress of March 1993.

Published for internal information use by the American Forces Information Service, a field activity of the Office of the Secretary of Defense (Public Affairs), Washington, D.C. This material is in the public domain and may be reproduced without permission.

Mister Chairman, members of the committee: I welcome this opportunity to share with you some thoughts on recent events on the Korean peninsula and the continuing relevance of United States Forces in Korea.

The past year has been the most eventful year in relations between the two halves of Korea since the end of the Korean War. No matter what the outcome of ongoing initiatives, we have reached a pivotal point in the struggle between north and south. Korea is on the brink of enormous change. Powerful inhibitors remain in place, but change will come.

Yet, as we emerge from the Cold War, it is critical that we not underestimate persisting regional tensions. Northeast Asia remains a divided region, full of emotional scars and distrust. Our military presence in Korea remains an irreplaceable investment, both for resolving the potentially volatile struggle within a divided Korea and for sustaining peace and stability in one of the world's most dynamic and powerful regions.

I believe that all of you understand the importance of our role in Korea, but there are two questions which we need to address today. First, given the changes in the world and on the Korean peninsula, is the continued presence of U.S. forces in today's numbers still justified? Second, are the costs associated with the security of Korea, and Northeast Asia, equitably distributed?

Since the end of the Korean War, the ROK (Republic of Korea) and U.S. have adhered to a multidimen

sional strategy. This strategy focused on creating a strong deterrent to shield political and economic development in the south, on the assumption that a strong economy and democratic institutions would overpower the weaknesses inherent in the Stalinist state to the north. From the start, we sought to create and sustain conditions that would decide the struggle through political, diplomatic and economic power, rather than through the dynamics of military force.

The roots of this strategy finally bore fruit in the later half of the past decade. After 30 years of backbreaking labor, a period that earned the South Korean people the sobriquet as one of the hardest working nations on Earth, the ROK fully emerged from the ashes of the Korean War. The 1980s were pivotal both in the maturation of democracy and full-blown economic expansion within the ROK.

The 1987 transition of power between presidents Chun (Doo Hwan) and Roh (Tae Woo) was decided in free elections, and democratic reform has continued at a steady, uncompromised pace ever since. Throughout the '80s, double-digit increases in annual GNPs (gross national product) were repeated again and again. South Korean conglomerates expanded into global businesses with markets and partnerships around the world. The ROK became globally competitive in textiles, steel, shipbuilding, automobiles, petrochemicals and electronics. In 1991, the per capita gross national product of the ROK rose to $6,250. It is estimated that

by the end of this century, the ROK will double its current wealth.

Nordpolitik Policy

On the diplomatic front, President Roh fostered a policy known as Nordpolitik. Through this policy, the ROK has sought to exploit the opportunities emanating from the end of the Cold War and develop close relations with those nations with influence on North Korea. Designed not to isolate the north, the ROK wooed those states that had previously been aligned with North Korea in an effort to alter their partisan attitude toward the peninsular struggle.

The success of Nordpolitik has been heartening. Once Eastern Europe was freed from Soviet shackles, the majority of its states formalized relations with the ROK and ended their military support to North Korea. In 1990, the USSR also established formal relations with the ROK. At the same time, the Soviets restructured their economic relations with North Korea, putting an end to postwar subsidization policies and insisting that future trade be based on hard currency. The republics of the Commonwealth of Independent States have built upon this foundation and relations between the ROK and the former Soviet states continue to progress. Even relations with the PRC (People's Republic of China) have warmed considerably. Trade between the ROK and the PRC has expanded rapidly, to a level of over $3 billion in 1991, and the Chinese

and South Koreans have exchanged trade missions. Thus, the diplomatic conditions affecting the balance on the peninsula have altered substantially.

In stark contrast, North Korea remains in the impoverishing isolation imposed by the world's most authoritarian regime. Kim Il Sung, the longest-ruling communist leader of the postwar era, remains in control. Over the past decade and more, Kim has been preparing the way for the eventual transfer of power to his son, Kim Jong II. When the process is complete, North Korea will become communism's first instance of dynastic despotism.

I do not believe the transition could occur at a more difficult time for Kim or his son. North Korea's challenges today are greater than at any time since the Korean War. After more than 30 years of virtually continuous, albeit unimpressive, economic growth, the north's economy is faltering. Hampered historically by neglect of its light industries, ideologically driven micromanagement, foreign debt and lack of foreign exchange, its economy is beset with problems. Last year, North Korea experienced negative growth.

The failure of North Korea's postwar diplomacy contributed to this decline. Although Kim based his leadership on the theme of Juche, or national self-reliance, the great degree to which his nation was dependent economically on the Soviet Union and PRC is becoming increasingly evident. Shortages have begun to appear in food, fuel, hard currency and technology.

With the dissolution of the Warsaw Pact, the fall of communism in the Soviet Union and the PRC's need to focus its energies inward, North Korea's economic

survival is imperiled. Lacking a consumer-oriented manufacturing base and isolated by its fractured and antagonistic relations with the Western world, North Korea has little possibility of a self-generated recovery.

North-South Talks

These conditions set the milieu for the past year's events. In 1990, North and South Korea began a series of north-south talks at the prime ministerial level focused on establishing a direct dialogue between the two states. The first four meetings had no substantive result, but were significant as the highest-level negotiations to occur between the two nations. In January 1991, North Korea suspended the talks in protest against the annual Team Spirit field exercise.

While talks were suspended, the ROK announced its intention to apply for separate membership in the United Nations. With the end of Cold War and the warming of relations between the ROK and the USSR and PRC, the path was cleared for acceptance by the U.N. Security Council. On 28 May (1991) after unsuccessfully attempting to convince the PRC to block the south's bid, North Korea announced that it also would apply for membership. In September, both Koreas entered the United Nations as separate states. In August, the north returned to the north-south bargaining table, and a series of unprecedented agreements have followed.

The most destabilizing issue affecting security on the peninsula, and the region at large, has been the growing suspicion that North Korea is on the verge of developing a nuclear weapon. A group of facilities, some of which are operational and others of which remain under construction, are located at Yongbyon, about 50 miles north of

Pyongyang. They include nuclear reactors and reprocessing and test facilities which clearly fit the profile of a nuclear weapons development program. Estimates are that continued could result in a progress nuclear device as early as next year.

Over the past year, this suspicion and the projected timetables captured the attention of the international community at large and the Republic of Korea especially. Even prior to the saga of Iraq's nuclear program, the world was acutely aware of the risks of nuclear weapons in the hands of aggressive dictators, and pressure against North Korea was developing.

Although North Korea signed the Nonproliferation Treaty in 1985, it had refused to sign the contingent IAEA (International Atomic Energy Agency) accord. The north insisted that the following conditions be met prior to signing: the withdrawal of U.S. nuclear weapons from the ROK; the establishment of a nuclear-free zone in Korea; and the removal of the U.S. nuclear umbrella over the ROK. The international community and the IAEA refused to accept any preconditions and continued to insist that North Korea abide with the NPT and accept inspections under the IAEA.

In the aftermath of Iraq, it became clear that an IAEA inspection regime was not a sufficient assurance of NPT compliance, and regional pressures on North Korea evolved into two separate tracks. The international community continued to press North Korea to sign the IAEA agreement and accept inspections of its nuclear facilities. At the same time, the ROK government introduced the notion of a bilateral agreement covering the two Koreas that would include a separate inspection regime. Central to the Korean track was an agreement to ban reprocessing of spent fuel. While the two tracks were linked by intent, the negotiations were separate.

U.S. Nuclear Withdrawal

Following President (George) Bush's September 1991 announcement to withdraw all naval and