Daewoo Engineering has requested mediation from the Ministry of Trade, Industry and Energy in response to the breakdown of negotiations over the construction contract for a new nuclear power plant in the Czech Republic. The ministry stated that it has not received any formal mediation request and lacks the legal authority to mediate negotiations between companies.
In a statement on November 2, Daewoo Engineering said it received a notice from Korea Hydro & Nuclear Power on October 30, announcing the termination of negotiations for the engineering, procurement, and construction (EPC) contract for the Czech nuclear power project. The company expressed serious regret over the unilateral termination of the negotiation process.
Previously, Korea Hydro & Nuclear Power announced on October 29 that it was ending negotiations with the Daewoo Engineering and Doosan Enerbility consortium regarding the construction contract for the Czech nuclear power plant. According to a document released by Daewoo Engineering, Korea Hydro & Nuclear Power determined that there were significant disagreements after rejecting the consortium's revised proposal, which included increased construction volumes and additional work without adjusting the contract amount.
Daewoo Engineering criticized the situation, stating, "It is unreasonable for a construction company, which is not responsible for design, to bear the increased construction volumes and additional work added after the bidding without adjusting the construction costs." The company also pointed out that the construction firm should not have to shoulder the project risks associated with the APR1000, the first of its kind being built in Europe.
The company claimed it submitted a revised proposal on October 29 that included a reduction in the total construction cost and acceptance of some of the increased volumes, accepting potential losses of hundreds of billions of won. However, Daewoo Engineering alleged that it learned of the unilateral termination declaration through media reports just 30 minutes after submitting the proposal, without any active review from Korea Hydro & Nuclear Power.
Daewoo Engineering explained that it had already invested hundreds of billions of won in personnel and resources in both the Czech Republic and South Korea before the contract was finalized. The company warned that if the bidding for a new construction firm fails, the entire project schedule could be delayed, urging the ministry to oversee the negotiation process and mediate a resumption of talks.
However, the Ministry of Trade, Industry and Energy reiterated that it has not received any formal mediation request from Daewoo Engineering. A ministry official stated, "We have been urging both sides to engage in smooth negotiations to uphold commitments with the Czech government, but we do not have the legal authority to directly mediate negotiations between companies with commercial interests."
To prevent disruptions in the Czech nuclear power project, the ministry plans to activate an emergency management system. A ministry official indicated, "We will implement an emergency management system to ensure that the minister and vice minister directly monitor project issues weekly, managing risk factors that could affect the schedule, quality, and costs to support project advancement."
* This article has been translated by AI.
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