The final signing of the Czech Dukovany new nuclear power plant contract, which was halted a day before the scheduled date, has been indefinitely postponed. Czech power company CEZ has decided to appeal a Czech court's decision to suspend the final contract and to seek damages from French power company EDF for the delay.

While the government states that "there will be no major issues with the final contract," some critics point out that amid the ongoing government vacuum, the government may have been complacent, overlooking the checks and balances from nuclear power leader France and the characteristics of the nuclear power industry.

Czech Government: "Will Calculate Damages and Claim Against EDF"

The final contract between Korea Hydro & Nuclear Power Co. (KHNP) and Dukovany II Nuclear Power Plant (EDU II), a subsidiary of the local ordering party CEZ, did not proceed as scheduled on the 7th (local time). During a press briefing in Prague, Czech Republic, Minister of Trade, Industry and Energy Ahn Duk-geun stated, "I cannot predict whether it will take days or months until the final contract." The Brno Regional Court in the Czech Republic accepted an injunction application filed the previous day by EDF, which had competed with KHNP for the contract, to suspend the contract procedure. As a result, the final contract cannot be signed until the court's decision is reached. Minister Ahn was en route to the Czech Republic to attend the signing ceremony scheduled for the 7th when he received news of the cancellation while on the plane.

CEZ has decided to take legal action to appeal the court's decision to accept the injunction. At a press briefing that day, Daniel Beneš, CEO of the CEZ Group, stated, "We will file an appeal (with the higher court) to dismiss the application and proceed with the project. As this is an important matter, we hope the court will make a swift decision." He added, "On behalf of the Czech side, I apologize to the Korean government delegation. Yesterday's court action was not impossible but was very unlikely, so it was difficult to predict." CEO Beneš also commented, "It seems that EDF wants Europe to choose only EDF and is lobbying to prevent external companies from building nuclear power plants in Europe."

CEZ also made it clear that it would claim damages for the additional costs incurred due to the delay in the final contract. Tomáš Pleskač, Chief Nuclear Officer and member of the Board of Directors at CEZ, stated, "If the contract is delayed by several months, damages of hundreds of millions of Czech korunas (tens of billions of Korean won) will occur. We will calculate the damages and claim them from EDF."

Concerns Raised About "Difficulty in Providing Trust Due to Political Instability"

The government drew a line, stating that the final contract would not be excessively delayed and that "the probability of the final contract falling through is low." However, concerns are being raised both within and outside the government that unexpected domestic and international variables, such as the Czech general election in October, could arise while the contract is postponed.

Previously, in 2013, French nuclear power company Areva (now EDF) filed a lawsuit challenging its disqualification in the bidding process for new nuclear power plants (Temelín Units 3 and 4) in the Czech Republic, engaging in delaying tactics. The bidding process subsequently faced setbacks, including court intervention, and was ultimately canceled in 2014 due to funding issues.

Given the characteristics of nuclear power projects, which involve long-term investment of massive capital and are closely linked to each country's energy policies, it is not uncommon for companies selected as preferred bidders to fail to finalize the contract. South Korea also has a precedent: in 2018, Korea Electric Power Corporation (KEPCO) was selected as the preferred bidder for the Moorside nuclear power plant project in the UK but lost its status due to the Korean government's nuclear phase-out policy and funding problems. However, Professor Jung Dong-wook of the Department of Energy Systems Engineering at Chung-Ang University predicted, "Since the cancellation of the Temelín nuclear power plant, the Czech government has been reviewing the nuclear power project for several years. Given the Czech Republic's power supply plan, completion in the near future is necessary, so the contract with Korea is unlikely to be jeopardized."

Some critics point out that the government's response may have been inadequate given the ongoing political vacuum in South Korea. Czech local media had previously expressed concerns that South Korea's early presidential election could be an obstacle to the nuclear power plant contract. Professor Park Jong-woon of the Department of Energy and Electrical Engineering at Dongguk University stated, "With a change of government highly likely in South Korea, the Czech Republic may have judged that the contract environment has deteriorated. It is a situation where it is difficult to provide confidence in the continuity of energy policy."

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