Corruption hurts nation's nuclear export plan
Singori Reactor 2 in Gori, South Gyeongsang Province
By Kim Tae-jong
The recent corruption scandal related to nuclear reactors is overshadowing the nation’s plan for nuclear plant exports. The scandal has raised concerns over the safety of made in Korea nuclear power plants.
Rep. Woo Yoon-keun of the main opposition Democratic Party cited the case of the nuclear reactor being built in Jordan by two Korean outfits. A consortium of the Korea Atomic Energy Institute and Daewoo Engineering and Construction will build a 5-megawatt reactor at Jordan University of Science and Technology in Irbid. The project is expected to be completed around July 2014.
Saehan Total Engineering Provider Co. (Saehan TEP) is the official testing company for the man machine interface system (MMIS) that will be used in the reactor. The problem is that Saehan TEP is embroiled in the recent scandal after forging the test results of substandard cables, which were later used in building two nuclear reactors here. The Singori Reactor 1 and the Sinwolsung Reactor 2 were shut down as a result, which also raised concerns over a possible blackout ahead of peak summer demand.
Experts say the scandal could damage the international reputation of reactors built in Korea. “The scandal can have a negative impact on the export of reactors,” said Lee Won-hee, a researcher at the Samsung Economic Research Institute. “The nation’s nuclear reactors have a competitive edge in terms of price and operational efficiency, but the country’s plan may backfire after the scandal.”
An industry official also said, “Even if no flaws are found in supplied parts that will be used in the reactor in Jordan, the Jordanian government can demand the cancellation of the contract with Saehan TEP, and tests parts made by another firm, which may delay the project and lead to financial losses to the Korean consortium and suppliers.”
In fact, Ponu Tech, the supplier of the MMIS, is concerned that Saehan TEP will not fulfill the contract. Like many industry watchers, it believes the firm is on the verge of collapse due to the scandal.
The previous Lee Myung-bak administration pushed forward a plan to export locally-designed reactors to make inroads into the global nuclear power plant market. Following the deal with Jordan, Korea made another historical step by winning a $20 billion contract to build four nuclear reactors in the United Arab Emirates (UAE). This would be the nation’s first nuclear power plant export deal.
UAE’s reactors will be the APR1400, the same model as the Singori Reactor 3 and Singori Reactor 4, which are also under investigation for possibe substandard parts. “If the operation of Singori Reactor 3 is suspended due to substandard parts, the UAE can make an official claim regarding the construction of reactors there,” an industry official said.
In response to the growing concerns, Korea Hydro & Nuclear Power (KHNP) CEO Kim Kyun-seop said in a news conference that the scandal has nothing to do with the export of nuclear reactors because the cables for the UAE reactor are made by a non-Korean company.
Nevertheless, experts are concerned that the reputation of Korea’s nuclear plant industry has been seriously hurt, because the scandal has revealed that parts suppliers, testing firms and KHNP were involved in deep-rooted corruption.
“The nation has to compete mainly with France and Japan for the export of nuclear reactors,” an industry insider said. “But the corruption scandal made it much more difficult for the country to compete in the export of reactors in the global market, especially now that Japan has emerged as a strong competitor due to the weakened yen.”