Exclusive: Land ministry joins review of Czech nuclear plant contract breakdown

Minister of Land, Infrastructure and Transport Hong Ji-sun said Tuesday that the ministry would examine what role it could play in mediating or coordinating between the client and contractor following the breakdown of contract negotiations for the Czech Dukovany nuclear power plant. The Ministry of Land, Infrastructure and Transport began reviewing the matter after the construction industry raised persistent concerns about a contract structure that forces contractors to absorb all cost overruns and project risks arising during nuclear plant construction.

Speaking to reporters after the 2026 Overseas Construction and Plant Day event at the Construction Association building in Nonhyeon-dong, Gangnam-gu, Seoul, Hong said the ministry's responsible department had begun reviewing the matter after news reports on the Dukovany contract breakdown appeared Tuesday.

Korea Hydro & Nuclear Power announced Thursday that it was ending contract negotiations with the Daewoo Engineering & Construction–Doosan Enerbility consortium. The two sides had been at odds over changes in construction scope and cost allocation. Korea Hydro & Nuclear Power, citing the Barakah nuclear power plant project in the UAE as a precedent, pushed for a lump-sum fixed-price contract under which the contractor bears all project risks within the amount agreed at signing. The consortium, by contrast, is said to have argued for a unit-price settlement method that would allow separate billing for additional construction volume arising after the detailed design is finalized.

Daewoo Engineering & Construction asked the Ministry of Trade, Industry and Energy to mediate and reopen negotiations. The ministry said it had no legal authority to arbitrate commercial disputes between private companies, but announced it would activate an emergency management system led by the minister and vice minister.

With the Ministry of Land, Infrastructure and Transport — the government body overseeing the construction industry — now moving to review contractors' grievances, attention is turning to whether it will coordinate positions across ministries. A ministry official said the ministry was well aware of the cost-related difficulties the construction industry was facing and that it intended to review the various views being raised.

Domestic construction companies have long called for reform of contract practices that require contractors to absorb additional costs caused by inflation or design changes on nuclear projects at home and abroad. The Ministry of Economy and Finance recently met with construction firms to gather opinions on abolishing special exemptions applied to Korea Hydro & Nuclear Power related to price fluctuations and design changes.

Large-scale nuclear projects involve long construction periods and significant external variables such as design changes and price swings, the industry argues, making institutional mechanisms for equitable risk-sharing between clients and contractors essential.

It remains to be seen whether the Ministry of Land, Infrastructure and Transport will gather industry input and pursue further consultations with related ministries. The current dispute could also accelerate broader discussions on reforming the system governing nuclear construction cost adjustments and project risk allocation.

In her remarks at Tuesday's event, Hong said the ministry would spare no effort in providing financial, personnel and technology support to help Korean companies actively identify and lead overseas projects, and pledged to build a contract-winning support framework tailored to each company's characteristics.

A construction industry official said similar disputes were playing out across numerous overseas projects beyond the Czech Dukovany plant, and called on the Ministry of Land, Infrastructure and Transport, as the responsible ministry, to scrutinize aspects of nuclear plant contracts that could be applied unfairly to the construction sector.