Korea Hydro & Nuclear Power has stopped construction contract talks with a Daewoo Engineering and Construction-led consortium for its $18.6 billion Czech nuclear project. This move exposes a major rift within the South Korean team behind one of the country’s largest overseas nuclear deals.
KHNP to Terminate Contract with Doosan Enerbility
The state-run nuclear operator stated that it would move to terminate its cooperation agreement with the consortium. This consortium is being led by Doosan Enerbility. The state operator will then launch a new bidding process to find a replacement contractor.
What Led to the Breakdown?
The breakdown comes after a year of disputes over construction costs and who should bear the financial burden of design changes. Additionally, according to industry sources, KHNP demanded a cut of more than 10 percent from the consortium’s original bid, equivalent to over 1 trillion won ($750 million).
Furthermore, KHNP said the two sides disagreed on key contract terms despite prolonged negotiations. The consortium accused KHNP of making a unilateral decision and called for talks to resume.
A Major Setback for the Project
The dispute raises concerns over potential delays and legal complications for the Dukovany project. The project involves constructing two 1,000-megawatt APR1000 reactors in the Czech Republic.
Project Cost
The deal is valued at approximately 407 billion Czech crowns ($18.6 billion), or 25 trillion won.
Choi Il-kyung, KHNP’s vice president and head of project operations, played down the risk of major disruption.
“While there may be some impact, we believe we can fully recover from it,” he said. “We are communicating closely with the Czech government and the customer.”
When were Daewoo E&C and Doosan Enerbility Chosen as Construction Partners?
Daewoo E&C and Doosan Enerbility were selected as construction partners in 2018 and participated in the bidding process that led to KHNP signing the main contract with the Czech customer in June 2025. However, the companies have yet to finalize a construction subcontract.
In a statement Thursday, the consortium stated that it had agreed to accept the construction unit prices submitted to KHNP in January 2024. Also, the consortium offered further concessions that would leave it absorbing financial losses.
Construction Consortium Requests Extended Deadline to Revise Terms, KHNP Declines
The consortium said the main sticking point was a set of revised contract terms introduced by KHNP on Oct. 7. This gives it only around three weeks to review the changes.
It requested an extension until Dec. 31, but KHNP rejected the proposal.
The consortium argued that the review period was unreasonable, particularly as Dukovany would be the first commercial deployment of the APR1000 reactor design.
KHNP countered that fixed-price contracting was essential to meet its obligations under its own agreement with the Czech customer.
The operator said it had raised its proposed payment to reflect additional work while seeking cuts to costs identified through external reviews as excessive, duplicated or incorrectly calculated.
KHNP proposed fixing the construction price once the basic design was approved, while the consortium sought payment adjustments for additional work identified during detailed design.
The operator argued that accepting such adjustments would leave it exposed to cost overruns under its own fixed-price contract.
KHNP also denied that its cost-cutting demands were linked to an underpriced bid or financial obligations stemming from its settlement with US nuclear technology company Westinghouse Electric.
KHNP to Choose a New Contractor
With negotiations at an impasse, KHNP plans to select a new contractor through competitive bidding, aiming to sign a contract by July 2027 and begin site preparation as scheduled in January 2028.
Choi said Daewoo E&C and Doosan Enerbility would remain eligible to participate despite a provision in their cooperation agreement barring them from rebidding.
He said the failed negotiations would not count against them, although they would have to compete under a selection process based largely on quantitative criteria and overseen primarily by external evaluators.
KHNP said essential design, permitting and project management work would continue during the transition.
The consortium urged KHNP to reconsider its decision and resume negotiations in the national interest.
Other Korean Supply Contracts Remain Unaffected
Other major Korean supply contracts remain unaffected, including Doosan Enerbility’s roughly 5.6 trillion won reactor equipment contract and a separate engineering agreement with Korea Electric Power Engineering & Construction.
KHNP clarified that ending negotiations would not automatically terminate the existing cooperation agreement, which requires a separate procedure.
Dukovany Nuclear Power Plant Expansion Factsheet
Project Name: Dukovany Nuclear Power Plant Expansion (Units 5 & 6)
Location: Dukovany, Czech Republic
Total Estimated Value: 407 billion CZK ($18.6 billion USD / 25–26 trillion KRW)
Project Scope: Construction of two 1,000 MW APR1000 nuclear reactors
Lead Operator / Prime Contractor: Korea Hydro & Nuclear Power (KHNP)
Client / Owner: Elektrárna Dukovany II (EDU II)
Project Key Milestones and Status
- Main Contract Signed: Completed in June 2025 between KHNP and EDU II
- Construction Subcontract Tender: Re-bidding process launches following breakdown in talks with original consortium; contract target by July 2027
- Site Preparation: Target start in January 2028
Key Supply & Engineering Contracts
- Engineering and Design: KEPCO E&C (Contract Signed)
- Reactor and Turbine Equipment: Doosan Enerbility (5.6 trillion KRW contract; Signed)
- Nuclear Fuel and Maintenance: KEPCO Nuclear Fuel & KEPCO KPS (Negotiations ongoing, targeting 2027)
- Civil Construction Subcontract: Open to competitive bidding after talks with the Daewoo E&C–Doosan consortium ended over price structure disputes
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