ČEZ: Long delays to the Czech Dukovany project could cause billions of crowns in damage

In the event of a lengthy delay lasting several months or even years, damage to the project to build nuclear units at Dukovany could run into billions of crowns. This would include, in particular, staffing costs, cost increases over the course of construction, higher capital costs and more. The exact amount of the damage, however, will not be known until the court rules. ČTK was told this today by Martin Novák, chief financial officer of energy company ČEZ. He reiterated that Elektrárna Dukovany II, the company in charge of the project, is preparing a cassation appeal against the court injunction that blocked the signing of the final agreement for Dukovany. It is likely to file it next week.

The signing of the final agreement with KHNP was originally scheduled for Wednesday, 7 May, but the Regional Court in Brno blocked it with an injunction the day before. The court acted on a motion by French company EDF, which challenged in court a decision by the Office for the Protection of Competition (ÚOHS). The office had ruled that the tender was in order. The court has not yet ruled on EDF’s lawsuit.

“It is too early to put an exact figure on the damage. But if the current situation really drags on for a long time, we are talking about billions of crowns,” Novák said of the potential damage caused by the delay to the Dukovany tender.

He said a lengthy delay would mean several months or even years. “But for now, we really have to wait and see how quickly the court rules,” he stressed.

According to Novák, the delay will cause several types of damage. These will include, for example, the costs of staff who will be unable to work effectively on the construction site while the project is blocked. Novák said several hundred people are already involved in the project. Further costs are expected from the gradual increase in the price of materials and services over time, as well as higher expenditure on the capital needed for construction.

He confirmed that Elektrárna Dukovany II, which is 80 percent state-owned and 20 percent owned by ČEZ, is now preparing a cassation appeal against the injunction to the Supreme Administrative Court (NSS). He believes the NSS will rule on it quickly. If the tender is upheld, Novák said, it will be possible to prepare for signing the final agreement with South Korean company KHNP, which won the nuclear tender, relatively soon.

Novák reiterated that if the company succeeds in court, it is prepared to seek compensation for the damage from EDF.

Elektrárna Dukovany II chief executive Petr Závodský said on Wednesday that postponing the signing of the final agreement for Dukovany would also push back the schedule for the entire project and its individual stages. Plans for bringing the new reactors into operation will also be delayed by months.

The government decided last July to build two new nuclear reactors. It chose the offer from South Korea’s KHNP over that of France’s EDF. Another bidder, Westinghouse, had already been excluded from the competition. Both EDF and Westinghouse challenged the tender before the antitrust authority, which examined it for several months. It ultimately dismissed the objections, and its chairman, Petr Mlsna, also dismissed the companies’ appeals on 24 April.