Daewoo Engineering's position is weakening following the breakdown of negotiations for the construction contract of the new Dukovany nuclear power plant in the Czech Republic. Despite the company's request for public mediation from the Ministry of Trade, Industry and Energy, the government has clarified that it lacks the authority to intervene. As Korea Hydro & Nuclear Power (KHNP) moves forward with the selection process for a new contractor, Hyundai Engineering has also expressed interest in bidding, putting Daewoo in a precarious position.
According to industry sources on November 12, Daewoo Engineering requested mediation from the Ministry after negotiations with KHNP for the main equipment construction contract for the Dukovany plant collapsed. Unable to find common ground on contract terms, Daewoo sought to restart negotiations through government intervention.
However, the Ministry has stated that it does not have the legal authority to intervene in commercial negotiations between companies. There are also concerns within the Ministry regarding Daewoo's decision to publicly request mediation without prior consultation.
KHNP has shifted its focus to selecting a new contractor. The company has held 91 discussions, including meetings with top executives, and extended the contract signing deadline set by the Czech client from September to the end of October, but no agreement has been reached.
For Daewoo Engineering, this project is difficult to abandon. The company has been preparing for a long time since joining Team Korea in 2018, investing hundreds of millions of won and deploying dozens of personnel for construction and permitting processes. Moreover, the Czech project was intended to serve as a stepping stone for expanding its overseas nuclear business, so losing this opportunity could disrupt its long-term growth strategy.
Hyundai Engineering's interest in bidding adds direct pressure on Daewoo. Hyundai has stated that it will consider participation once the schedule and conditions for the re-bidding of the Czech nuclear project are finalized. In 2018, Hyundai formed a consortium with Samsung C&T to compete against the Daewoo-Doosan Energy consortium. If renegotiations fail and Hyundai enters the bidding, Daewoo will face competition from its former rivals once again.
Daewoo Engineering remains focused on reviving the existing negotiations. The company argues that entering into a fixed-price contract without a completed basic design could lead to losses due to increased quantities. On October 29, Daewoo submitted a final revised proposal that significantly lowered the amount, accepting the risk of incurring losses in the billions of won.
A Daewoo representative stated, "I understand that the business division assessed the potential for significant losses if KHNP's proposal was fully accepted. We are requesting KHNP to facilitate another round of negotiations amicably."
KHNP plans to select a new contractor to avoid delays in the project. The goal is to complete the selection by July 2027 to adhere to the scheduled site stabilization start in January 2029. While specific bidding conditions have yet to be finalized, evaluations will consider project conditions, compliance with timelines, and the feasibility of contract execution.
Daewoo Engineering is also keeping the door open for new bidding opportunities. A company official remarked, "If there is a chance to participate, we will prepare, and from our perspective, there is no reason not to."
However, another source cautioned, "Discussing participation in new bidding at this stage is speculative. It is essential to create a construction contract structure that reasonably shares risks without undermining national interests and the competitiveness and trust of Korean nuclear power."
* This article has been translated by AI.
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