Daewoo E&C calls contract talks collapse 'unilateral,' urges ministry to mediate

Daewoo Engineering & Construction has expressed regret over the collapse of contract negotiations with Korea Hydro & Nuclear Power for new nuclear power plants in the Czech Republic, and has called on the Ministry of Trade, Industry and Energy to mediate a resumption of talks. The company said it submitted a proposal absorbing hundreds of billions of won in losses at the consortium level, only to learn through media reports that Korea Hydro & Nuclear Power had declared the negotiations over — just 30 minutes after receiving the revised offer and without any substantive review.

In a statement released Monday, Daewoo E&C said it was asking the ministry to "directly review the negotiation process between Korea Hydro & Nuclear Power and Daewoo E&C, examine the consortium's final proposal, and step in to mediate a renegotiation."

Earlier Monday, the Ministry of Trade, Industry and Energy said it would activate an emergency management system led by the minister and vice minister in response to the breakdown of the Czech nuclear plant construction contract negotiations, and would work to preserve confidence in South Korea's core nuclear competitiveness — delivering projects on time and on budget.

Daewoo E&C said that if the ministry stepped in directly to mediate a renegotiation of the construction contract, "it would reduce the risk South Korea must absorb and reassure the Czech project owner."

Daewoo E&C said it received an official notice from Korea Hydro & Nuclear Power on Friday terminating the construction contract negotiations. According to the company, the notice stated that the revised proposal submitted by the Daewoo E&C consortium on Thursday "did not reflect Korea Hydro & Nuclear Power's request to incorporate a significant increase in construction quantities," and that the consortium had asked for separate contract treatment of additional work identified after the submission of the bid proposal in 2024 — a point of major disagreement.

Daewoo E&C said the situation confirmed that contractors with no role in design were being asked to absorb a sharp increase in construction quantities without any adjustment to costs, and that additional work added after the bid was to be borne entirely by the contractor without cost revision. It added that the structure placed the full risk of building the APR1000 — a new reactor type being constructed for the first time anywhere in the world — in a new market in Europe squarely on the contractor's shoulders.

The company also said that through its revised proposal submitted Thursday, the consortium had cut the total construction cost and accepted a portion of the increased quantities, submitting a proposal that absorbed losses running into the hundreds of billions of won. "About 30 minutes after submission, we learned through media reports of a unilateral declaration of collapse, with no active review by Korea Hydro & Nuclear Power," it said.

Daewoo E&C also said it had committed significant resources at Korea Hydro & Nuclear Power's request even before a contract was signed, and had worked diligently to prepare for project execution.

"After Korea Hydro & Nuclear Power signed the main contract with the Czech project owner in June 2025, we received a preliminary work commencement order from Korea Hydro & Nuclear Power in July of that year and have since been carrying out construction and licensing procedures," the company said. "We have pursued the steps needed for successful project execution, and in the process have pre-invested tens of billions of won without settlement," it added.

Daewoo E&C also said the unilateral termination notice served on a contractor that had participated in bidding, contract award, construction work and licensing as part of Team Korea for eight years carried the potential for future legal disputes.

The company said that even if Korea Hydro & Nuclear Power proceeded with a new contractor bidding process early next year as announced, it would not be easy to find a construction company willing to accept the same risk conditions presented to the current Daewoo E&C consortium.

"If the bid were to fail, it would clearly lead to delays across the entire project schedule, damaging the core competitiveness of South Korea's nuclear industry and posing a risk of undermining national competitiveness," Daewoo E&C said, urging the Ministry of Trade, Industry and Energy and Korea Hydro & Nuclear Power to proceed with renegotiation.

The Dukovany nuclear power plant project involves Korea Hydro & Nuclear Power supplying two APR1000 Korean-model reactors — each rated at 1,000 MW — at the Dukovany site in the Czech Republic (Units 5 and 6), at a total project cost of about 422 billion Czech koruna ($19.4 billion). Construction is scheduled to begin in November 2029, with trial operations for Units 5 and 6 set to begin in April 2037 and April 2038, respectively, followed by commercial operations two years later.