Daewoo E&C expressed regret over the breakdown of negotiations with Korea Hydro & Nuclear Power (KHNP) for the construction contract of the new Czech nuclear power plant project, requesting the Ministry of Trade, Industry and Energy to mediate a renegotiation.

In an official statement released today, Daewoo E&C said, "We received an official notice from KHNP on October 30 regarding the termination of construction contract negotiations," adding, "We request the Ministry of Trade, Industry and Energy to mediate the renegotiation of the construction contract so that the project can be normalized as soon as possible."

According to Daewoo E&C, KHNP determined that the revised proposal submitted by the Daewoo E&C consortium on October 29 failed to adequately reflect requests to account for increased construction volume.

KHNP also notified the termination of negotiations on the grounds of a significant gap in positions, as Daewoo E&C took the stance that additional tasks identified after the submission of the 2024 bidding proposal should be handled through a separate contract, rather than being included in the final proposed total contract amount.

Daewoo E&C argues that it is unreasonable for a constructor not in charge of design to shoulder increased volume and additional tasks without any adjustment to construction costs.

The company also pointed out that the structure forces the constructor to fully shoulder the risks of introducing the APR1000, a new reactor design being built for the first time in the world, into the European market.

Daewoo E&C claimed, "Even though we submitted a proposal through a revised negotiation plan that cut the total construction cost and accepted the increased volume to some extent, thereby absorbing hundreds of billions of won in losses, we learned about the unilateral declaration of breakdown—made without active review just 30 minutes after submission—through news reports."

It added that these conditions were presented on October 7, near the final stage of negotiations, and although it requested sufficient time for review, unilateral termination procedures were pushed forward.

Daewoo E&C stated that following the prime contract signing between the Czech client and KHNP in June of last year, it received a Limited Notice to Proceed (LNTP) from KHNP in July of the same year, carrying out construction tasks and licensing procedures.

In addition, the company explained that even before signing the construction contract, it deployed dozens of personnel and material resources to the Czech Republic, Gyeongju, and Seoul at KHNP's request, investing tens of billions of won upfront without settlement.

Stating that "it is difficult to accept the notice of negotiation termination given that we have participated in the bidding, winning, construction tasks, and licensing for about eight years as a member of Team Korea," the company added, "Legal circles suggest that this unilateral termination of negotiations and push for contract cancellation could lead to legal disputes."

Daewoo E&C requested, "For the success of the new Czech nuclear power plant construction project and the growth of South Korea's nuclear industry competitiveness, the Ministry of Trade, Industry and Energy should review the negotiation process and final proposals of both sides and mediate a renegotiation separate from the re-bidding pursued by KHNP."

(Photo: Yonhap News)