Korea Hydro & Nuclear Power Terminates Negotiations with Czech Unit Construction Consortium, Plans to Re-Tender for General Construction Contractor

Korea Hydro & Nuclear Power (KHNP) officially announced on October 29 that, due to the breakdown of negotiations with the construction consortium formed by Daewoo Engineering & Construction and Doosan Enerbility over key subcontracting terms, it will initiate procedures to terminate the cooperation agreement and re-select a new construction contractor to advance the construction of two gigawatt-class advanced pressurized water reactor units at the Czech Dukovany Nuclear Power Plant.

The Czech government selected KHNP as the preferred bidder for the project in July 2024 and formally signed a general contracting agreement worth 26 trillion Korean won (approximately USD 19.4 billion) in June 2025. As early as 2018, Daewoo Engineering & Construction and Doosan Enerbility were selected as construction partners and participated throughout the bidding process. However, in the subcontracting negotiations following the execution of the main contract, the two sides developed serious disagreements over total project cost, contract structure, division of construction interfaces, calculation of baseline quantities, and the mechanism for flowing down main contract terms into subcontracts. KHNP advocated a fixed lump-sum “turnkey” model based on quantities determined at the basic design stage to lock in cost certainty and maintain consistency with the owner's main contract; the construction consortium insisted on dynamically adjusting payments based on actual quantities at the detailed construction design stage and demanded cost compensation for quantity increases.

KHNP stated that despite multiple rounds of working-level negotiations, dispute mediation committee proceedings, and high-level consultations, the two sides were unable to bridge their differences. It has now formally initiated legal procedures to terminate the original consortium cooperation agreement and is fully committed to formulating a comprehensive response plan. The company plans to hold an information session for potential bidders in January 2027, formally launch the tender in April, and select a new construction contractor by July 2027. KHNP emphasized that it is maintaining close coordination with the Czech project owner, Dukovany II Nuclear Power Company, to ensure the schedule is not disrupted. Site preparatory works are planned to begin in January 2028, full construction of the main works is scheduled for November 2029, and the two units are planned to be completed and commissioned in 2039 and 2040, respectively.

Daewoo Engineering & Construction issued a statement pointing out that KHNP was attempting to shift the cost risks arising from design changes onto the construction party, failed to adequately account for actual quantity growth, and had previously required contractors to exclude contingency fees from their bids so as to incorporate them into the owner's overall bid price; Daewoo Engineering & Construction has communicated its position to KHNP and expressed its willingness to continue discussions on the matter. Doosan Enerbility stated that it will actively prepare for the re-tender and explicitly clarified that this subcontracting dispute and re-tender are unrelated to the previously signed core equipment supply contract: its contract with KHNP signed in December 2025 for the supply of reactor main equipment and turbine-generator sets remains fully valid and has not been affected by any modification or termination.