MOTIE Faces KHNP-Daewoo E&C Mediation Call

Following a breakdown in negotiations between primary contractor KHNP and builder Daewoo E&C on the Czech nuclear power plant construction project, industry focus has shifted to the potential involvement of the Ministry of Trade, Industry and Energy (MOTIE) for direct mediation. Daewoo E&C notified KHNP of the termination of the negotiations on November 2, requesting a renegotiation through MOTIE.

The disagreement arose from adjustments to construction costs and risk-sharing methods. KHNP argued that Daewoo E&C should bear the additional costs, while Daewoo E&C denied this, stating it had submitted a revised proposal cutting costs and accepting some volume increases. Despite this, KHNP declared a breakdown via media shortly after Daewoo E&C's proposal, leading Daewoo E&C to accuse KHNP of unilateral termination.

Daewoo E&C also noted tens of billions of won in pre-investments made without contract settlement, raising concerns about legal disputes. MOTIE, led by the minister and vice minister, is operating an emergency management system focused on maintaining the 'On Time, On Budget' competitiveness of Korean nuclear power plants. However, industry experts express doubts about the success of a rebid, as finding a builder willing to shoulder the risks of the new APR1000 reactor model and European market uncertainties could delay the project and harm national competitiveness.

With Daewoo E&C seeking MOTIE's review of past negotiations and mediation, the focus is on whether MOTIE will independently mediate between the two parties and KHNP's rebidding process.