KHNP, consortium fail to agree on Czech nuclear plant contract

Korea Hydro & Nuclear Power (KHNP) announced Thursday that it had ended negotiations with a consortium of Daewoo E&C and Doosan Enerbility over a construction contract for a 26 trillion won ($19.4 billion) nuclear power project in the Czech Republic, after the two sides failed to reach an agreement on key terms.

KHNP said it would begin terminating its cooperation agreement with the consortium and prepare a competitive bidding process to select a new contractor, seeking to minimize disruption to construction of the two Korean-designed APR1000 reactors at the country’s Dukovany site.

“KHNP and the construction consortium had worked to reach an amicable agreement through working-level negotiations, a dispute mediation committee and management-level talks, but failed to reach a final agreement,” the state-run nuclear operator said.

The breakdown follows about 15 months of negotiations after KHNP signed the main contract with Elektrarna Dukovany II, the Czech state-run company in charge of the project, in June 2025.

KHNP said the two sides had already been at odds over key contract terms when KHNP submitted its final bid in April 2024, and failed to resolve their differences even after months of further talks.

It explained that the dispute involved not only construction costs but also the contract structure, scope of work, baseline quantities and how the main contract’s terms would be reflected in the construction contract.

KHNP proposed a lump sum contract based on baseline quantities established at the basic design stage, arguing that it would align the construction contract with the main project agreement and provide greater cost certainty.

However, the consortium sought to adjust payments based on quantities determined at the detailed design stage, including increases in construction volumes.

The company said it had revised its proposal to account for additional work and requested detailed cost breakdowns to assess the proposed construction price. Despite a dispute resolution committee that met 11 times in July and further talks between senior executives in September and October, the two sides failed to bridge their differences.

KHNP plans to select a replacement contractor by July 2027, with a briefing for prospective bidders scheduled for January and bidding set to open in April, although the detailed process and timeline have not been finalized.

The company said it would work closely with the Czech project owner to keep the project on schedule, with site preparation due to begin in January 2028 and full construction scheduled to start in November 2029. The two reactors are slated for completion in 2039 and 2040, respectively.

While selecting a new contractor, KHNP would handle key tasks, including design, permitting and project management, or outsource them to other companies.

The consortium expressed regret over KHNP’s decision and called for negotiations to resume, saying it had submitted a revised contract proposal at “a reduced price, despite the losses it would incur.”

Daewoo E&C said KHNP introduced revised contract terms on Oct. 7, but failed to allow sufficient time for review before ending negotiations, adding the consortium had formally requested an extension of the deadline to Dec. 31.

“Requiring the construction consortium to finalize its position and conclude negotiations within just three weeks was simply unrealistic,” Daewoo E&C said, citing the need for thorough assessments of costs, construction schedules and work scope for the first commercial reactor using the APR1000 design.

The consortium also criticized KHNP’s proposed lump sum contract, arguing that it would leave the builders bearing a substantial share of additional costs arising from design changes, despite their limited involvement in the design process.

“We ask KHNP to resume negotiations with the construction consortium in good faith, in the broader interest of the project and the national interest,” the company said.