Dukovany nuclear plant loses its builder as Seoul declines to mediate

The ministry says no

Daewoo E&C went public on the morning of 1 November. It asked South Korea's Ministry of Trade, Industry and Energy to mediate a renegotiation of the construction contract for the Czech plant. It urged the ministry to review the negotiation process directly and to examine the consortium's final proposal, so the project could "return to normal as soon as possible". That was the consortium's stated aim.

The ministry's answer was not encouraging. It left the consortium with no referee.

It said it "has no legal authority to mediate negotiations between companies with commercial interests," according to BigGo Finance. It also said it had not received an official request from Daewoo E&C to mediate. What it did offer is monitoring. An emergency management system will have the minister and vice minister personally review project issues every week, tracking risks to schedule, quality and cost. That is oversight, not arbitration.

The breakdown dates to 29 October, when KHNP ended construction contract negotiations with the Daewoo E&C and Doosan Enerbility consortium. KHNP delivered a formal notice of termination to Daewoo E&C the following day. The talks had run about 15 months. They failed despite working-level negotiations, a dispute resolution committee and executive-level talks, KHNP said. That sequence matters. The ministry's refusal leaves the consortium without an outside forum.

What broke down

Money is the first fault line. So is the risk of getting the price wrong. Industry sources cited by Construction Review said KHNP demanded a cut of more than 10 percent from the consortium's original bid, over 1 trillion won ($750 million). KHNP says it raised its proposed payment to reflect additional work while seeking cuts to costs that external reviews found excessive, duplicated or wrongly calculated. KHNP also denied that its cost-cutting demands were linked to an underpriced bid. The two sides describe the same negotiation in different terms.

The immediate trigger was a set of revised contract terms KHNP introduced on 7 October. That set a clock. It gave the consortium about three weeks to review the changes. It asked for an extension until 31 December; KHNP rejected the request. The consortium called the move unilateral and asked for talks to resume.

The two sides also disagree on contract structure. KHNP wanted a fixed-price contract, arguing that was essential to meet its obligations under its own agreement with the Czech customer. The consortium wanted payment adjustments for additional work identified during detailed design. It says it had already agreed to accept the construction unit prices submitted in January 2024 and offered further concessions that would leave it absorbing financial losses. KHNP said accepting such adjustments would leave it exposed to cost overruns under its own fixed-price contract. KHNP says it has used fixed-price contracts for nuclear projects in Korea and the United Arab Emirates, and that its request went through external expert review.

The APR1000 is the consortium's central argument. Dukovany would be the first commercial deployment of the design. In a Q&A booklet released on 30 October, the consortium said the Czech market brings local and European licensing rules. Unlike the APR1400, it said, there is no reference plant to price against. It also said it learned of KHNP's declaration of a breakdown about 30 minutes after submitting its revised proposal, without any active review.

The money and the machines

The project covers two 1,000-megawatt APR1000 reactors in the Czech Republic. The two accounts of its value do not match. Construction Review put the deal at approximately 407 billion Czech crowns ($18.6 billion), or 25 trillion won.

BigGo reported the contract as worth approximately 27 trillion won, or about $20.1 billion. The figures differ. The gap between the two figures is roughly 2 trillion won.

Daewoo E&C says it offered to accept losses of hundreds of billions of won, including cutting the total construction cost and partially accepting the increased volume of work. Daewoo says it made concessions. It also says it pre-invested hundreds of billions of won without settlement, after KHNP instructed it to begin preliminary work in July last year.

KHNP plans to select a new contractor by July 2027. It will terminate its cooperation agreement with the consortium and launch a fresh bidding process to find a replacement.

What happens next

KHNP's vice president for project operations played down the risk. Choi Il-kyung said: "While there may be some impact, we believe we can fully recover from it". He added that the company was communicating closely with the Czech government and the customer.

The consortium is less relaxed. It has raised the possibility of a legal dispute over its pre-investment. It says it invested personnel and material resources under KHNP's instruction.

It argues that ending the partnership would damage its relations with the Czech government and undermine Team Korea's credibility abroad. KHNP disagrees. Its position is that changing contractor will not directly undermine Czech confidence in Team Korea as a whole. Each side frames the reputational risk differently. That difference will shape any future negotiation.

For the Czech customer, the practical question is time. A new tender has to be run and a new contractor mobilised. Neither KHNP nor Daewoo E&C has said publicly what that does to the construction schedule or the final price. The ministry's emergency management system will review risks to schedule, quality and cost every week.