European Commission asks Czechia to delay signing Dukovany contract

Brussels, 12 May (ČTK correspondent) - The European Commission is asking Czechia to delay signing a contract for the construction of two new nuclear units at the Dukovany power plant. It is investigating whether the Korean company KHNP received foreign subsidies that could distort the European Union’s internal market. This is stated in a letter sent to Czech Industry and Trade Minister Lukáš Vlček by European Commission Vice-President Stéphane Séjourné, which ČTK had the opportunity to review.

The Brno Regional Court has also blocked the signing of the final Dukovany agreement. The tender was won by the Korean company KHNP, while French company EDF was unsuccessful.

The EU executive has already launched a preliminary review to assess whether potential foreign financial contributions received by the Korean company constitute foreign subsidies and, if so, whether those foreign subsidies distort the internal market.

As part of the preliminary review, the Commission requested information from both ČEZ Group and the Dukovany power plant, as well as from the Korean company KHNP. However, the parties have so far “not provided sufficient information in response to these requests,” the letter dated 2 May this year states. “Based on the information provided, as well as further information uncovered by the Commission’s departments during the preliminary review, there remain significant indications that the party (KHNP) received foreign subsidies that may distort the internal market,” the letter adds.

In this context, the EU executive stresses that it “is not prejudging the final decision,” but is currently preparing a decision to launch an in-depth investigation. The Commission is therefore asking the Czech Republic to cooperate until it reaches a final decision and to delay signing the contract.

The review concerns compliance with the 2022 Regulation on foreign subsidies distorting the internal market (FSR). “The duty of sincere cooperation requires the Czech Republic to avoid any situation that would irreversibly conflict with the concerns set out in this letter and that could have irreversible effects preventing the effective application of the FSR,” the letter says.

At the end of the letter, the Commission Vice-President for Prosperity and Industrial Strategy stresses that “the request and the investigation are not in conflict with the project (to build the Dukovany plant).”

“On the contrary, our intention is to ensure legal certainty and ensure that the rules of our internal market are observed,” he adds.