Analysts: Delay to Czech tender for Dukovany is a complication and will also bring financial costs

The blocked signing of the Dukovany contract is complicating the completion of the tender, and analysts expect delays of several months. The delay will also mean additional economic costs, which in the worst-case scenario could rise to billions of crowns. This is according to comments by analysts to the Czech News Agency (ČTK). Such problems are relatively common in tenders of this scale, they said.

The Regional Court in Brno today issued an interim injunction blocking the signing, scheduled for Wednesday, of the final agreement for the construction of nuclear units at Dukovany. The court acted on a motion by EDF, which challenged a decision by the Office for the Protection of Competition (ÚOHS) in a lawsuit. The antitrust authority had ruled that the tender was in order.

Jiří Gavor, an analyst at ENA and executive director of the Association of Independent Energy Suppliers (ANDE), said similar complications could be expected in a contract of this size. He said the extent of the problem would depend on how long the injunction remains in force. A longer delay, he said, would be a major setback for the entire project. He also noted that the completion of the tender had already been delayed.

Gavor drew attention to the ongoing proceedings at the European Commission, where EDF has also filed a complaint over the conduct of the tender. He said these could have much more serious consequences for the entire tender, because a decision could come after the contract with KHNP has been signed. If the Commission were to rule in favor of the French company, Gavor therefore hopes the planned agreement with KHNP will include safeguards ensuring that the Korean company bears the economic costs.

Jiří Tyleček, an analyst at XTB, expects the injunction to delay the tender by several months. "However, a more significant delay cannot be ruled out. It is still too early to speculate about delays to the construction schedule. There are also legal steps that could shorten the delay, and it remains to be seen whether they will be used," Tyleček said. He considers the risk of part or all of the tender being cancelled more serious, although he said it was very difficult to speculate at this point about whether any irregularities had occurred that could jeopardize the tender.

Tyleček also highlighted the financial impact of the interim injunction on all parties involved. "I can imagine financial losses reaching as much as several billion crowns if the tender were partially or entirely cancelled," he noted.

Radim Dohnal, an analyst at Capitalinked.com, said the Brno court's decision was a major complication for the new nuclear units. The Czech state must now hope the situation can be resolved within the next few months, he said. In the future, the state could also learn from this that a tender of this size can encounter such difficulties. "Perhaps that is why, for example, Poland decided to take the route of a government decision. A tender can bring lower prices and better terms overall, but it can also get stuck like this," Dohnal added.