Gov't advises KEPCO, KHNP to resolve legal dispute over UAE plant project at home

The fourth and final unit of the South Korean-built Barakah Nuclear Energy Plant in the United Arab Emirates / Courtesy of Korea Electric Power Corp.

The government on Friday advised the Korea Electric Power Corp. (KEPCO) and the Korea Hydro & Nuclear Power Co. (KHNP) to settle their legal dispute over payments involving a United Arab Emirates (UAE) power plant project domestically.

The Ministry of Trade, Industry and Resources advised the two state-run companies to transfer the case, currently pending at the London Court of International Arbitration (LCIA), to the Korean Commercial Arbitration Board.

It cited benefits in the cost and litigation period, as well as risks of South Korea's nuclear power plant technologies potentially being leaked overseas. The ministry also urged the companies to form a consultative body to hold negotiations for a resolution.

KEPCO and KHNP have been undergoing a dispute for months over the payment of additional construction costs for their joint Barakah nuclear power plant project, under which they completed the construction of four nuclear reactors in the UAE.

The 20 trillion-won ($13.95 billion) project marked Korea's first-ever overseas nuclear power project.

Last year, KHNP filed an arbitration claim against KEPCO, its parent company, with the LCIA, demanding reimbursement for additional costs it spent on the project due to delays and extra work orders caused by the UAE and KEPCO.

KEPCO is currently negotiating a settlement for additional costs with the Emirates Nuclear Energy Company, which commissioned the project, according to ministry officials.

Last month, Industry Minister Kim Jung-kwan reprimanded the companies for their dispute in a policy briefing session and urged them to work together to expand Korea's foothold in the global nuclear power plant market.