Delays to KHNP deal could raise the price of Czech nuclear units at Dukovany, Vlček says

If the signing of the agreement with KHNP to build new nuclear units at Dukovany is delayed, it will affect the price, according to Industry and Trade Minister Lukáš Vlček (STAN). The minister has no information that the South Korean company intends to withdraw its offer in its entirety, but expects it will have to update it because of rising labour and material costs. Vlček was responding on Czech Television (ČT) to a statement made today by a KHNP representative that an extension of the offer for the Dukovany units is not certain.

According to Vlček, the ministry is trying to negotiate with the South Korean company on the validity of its offer. “We are discussing how long the offer is valid, especially on pricing,” the minister said. He stressed that he had no information that KHNP’s offer would be withdrawn in its entirety. However, according to Vlček, the company will have to update its offer if the signing of the agreement is delayed. “After all, construction costs are rising, and so are material costs,” he added.

The final signing of the agreement with KHNP, originally planned for 7 May, was blocked by an interim injunction issued by the Regional Court in Brno. The court acted on a motion by French company EDF, which challenged in court a decision by the Office for the Protection of Competition that the tender had been conducted properly. Prime Minister Petr Fiala (ODS) said on Tuesday that the final contract might not be concluded before his government’s term ends. That will depend on the court’s decision.

Elektrárna Dukovany II (EDU II), the company responsible for the nuclear tender, and KHNP filed appeals against the interim injunction last week. The Supreme Administrative Court is now hearing them. “The Supreme Administrative Court asked Elektrárna Dukovany II to respond to KHNP’s appeal. We are responding today,” ČEZ spokesperson Ladislav Kříž said today, commenting on the latest developments. According to him, the Regional Court has not yet asked the company to respond to EDF’s lawsuit itself. “We hope the courts will act very quickly on this strategically crucial project for Czechia’s energy security,” Kříž added.

KHNP’s current offer is valid until the end of June. Harry Chang, vice president of KHNP’s project division for the nuclear power plant in Czechia, told ČT that an extension of the offer to build the nuclear units was not certain. The company would have to assess any request from the Czech side, consider the circumstances and then make a decision, he said.

The government decided to build two new nuclear reactors last July. It preferred the offer from Korea’s KHNP to EDF’s. It had already eliminated another bidder, Westinghouse, from the competition. The construction of new nuclear units in Czechia is expected to be the country’s largest-ever contract. At current prices, the cost of the currently preferred plan to build two reactors at Dukovany is 407 billion crowns.