KEPCO chief says $2b Westinghouse royalty per reactor is a ceiling, not a commitment

Korea Electric Power Corporation President Kim Dong-chul said Monday that the $2 billion per-reactor technology fee South Korea would owe US nuclear firm Westinghouse for building Korean-designed reactors in the United States represents an "upper-limit guideline," not a fixed payment obligation.

Speaking at the National Assembly's national audit of the Ministry of Trade, Industry and Energy, Kim was asked by People Power Party lawmaker Park Sung-min whether the government had agreed to pay Westinghouse roughly $2 billion per reactor in technology fees, service costs and nuclear fuel charges as part of a US investment project. "The $2 billion is a ceiling — it does not mean we will pay all of it," Kim said.

Kim said the technology fee paid to Westinghouse during the Czech Republic's Dukovany nuclear power plant export process had been less than $175 million per reactor. When Park said the total royalty paid to Westinghouse for the Dukovany contract had been $350 million, Kim pushed back. "What you know is far too high. You can assume it was considerably less than that," he said.

When Park pressed him on whether the terms for the US reactor construction project were less favorable than those for the Dukovany deal — which had drawn criticism as a "sell-out contract" — Kim said his team had done its best in negotiating the supplementary agreement with Westinghouse.

He went on to say that future specific reactor contract negotiations with Westinghouse would be conducted within the bounds of that agreement.

On South Korea's plan to acquire a 5 to 10 percent stake in Westinghouse, Kim said securing the equity would improve relations with the company and smooth ties with the US government, helping Korea enter the US market and third-country markets going forward.

"Whether to acquire the stake and how large a stake to take will be decided within the most reasonable range possible," he said.