South Korea has fined a businessman 1 million won ($977) for making an unauthorized contact with North Koreans over a project to build a high-speed railway and a parallel road in North Korea, an official said Tuesday.

The unification ministry imposed the administrative penalties in March on the businessman, identified only by his last name Kim, for meeting with North Koreans in China in December for the project, the ministry official said.

South Koreans are required to win the government's approval before a meeting with North Koreans and their trip to the communist neighbor. The two Koreas still technically remain in a state of war since the 1950-53 Korean War ended in a truce, not a peace treaty.

Kim has encouraged local companies to join a project to build a railway and a road connecting Kaesong near the border with South Korea to North Korea's northwestern city of Sinuiju via Pyongyang.

In December, an opposition lawmaker claimed that North Korea and China had agreed to build a high-speed railway and a road parallel to it that link the three North Korean cities.

Still, the ministry downplayed the possibility of local companies participating in the project.

The ministry said it is nearly impossible for South Korean firms to make massive investments in North Korea due to sanctions imposed by Seoul on Pyongyang in 2010 following a deadly sinking of a South Korean warship by the North.

The North has refused to take responsibility for the sinking of the warship, which claimed 46 South Korean sailors' lives. (Yonhap)