KHNP terminated negotiations with the Daewoo-Doosan consortium regarding the construction of new reactor blocks at Dukovany.

The South Korean company Korea Hydro & Nuclear Power (KHNP) has officially terminated contract negotiations with the construction consortium comprised of Daewoo Engineering & Construction and Doosan Enerbility, by deciding to appoint a new main contractor to build two APR1000 reactors at the Dukovany nuclear power plant in the Czech Republic

It should be noted that the Government of the Czech Republic chose KHNP as the preferred bidder in July 2024 and signed a contract worth 19.4 billion dollars in June 2025; negotiations on subcontract terms with the construction partners have now collapsed. The main disputed issues were construction costs, contract structure, and transfer of risk: KHNP insisted on a contract with a fixed total price (lump sum) based on the baseline quantities from the base project to ensure financial certainty, while the consortium sought payment adjustments based on the detailed design and coverage of costs for subsequent changes.

In other words: KHNP demanded that payment be fixed with no adjustments, while Doosan demanded that adjustments be made in accordance with costs to protect against market fluctuations.

Due to the disagreement, KHNP initiated termination proceedings of the collaboration agreement and announced a new tender for selecting a contractor by July 2027, with assurances that site preparation would begin in January 2028 and main construction in November 2029 (with planned reactor completions in 2039 and 2040). Doosan stated that this decision does not affect previously signed contracts for reactor equipment and turbo generators, and that they plan to participate in the new tender as well.

Comment

This collapse of negotiations between KHNP and its (long-standing – KHNP and Doosan have a very developed cooperation, so we interpret that in the end they will still get this job, albeit under different and somewhat better terms) construction partners on the Dukovany project represents a serious signal and a reminder of how complex business models in the nuclear industry are. And we should add that fixed-price contracts (lump-sum) provide maximum certainty to the investor, but shift a huge risk of unexpected price swings of materials and engineering changes onto the contractor – a risk the Korean consortium was not willing to accept without reservations. And for the nuclear renaissance in Europe, where budget overruns and delays have historically been the main problem, this situation shows that balancing the financial discipline of investors and feasibility on the ground will be key tests for all future projects: nuclear projects are long and highly sensitive to market fluctuations.

S.A.