PRAGUE (Reuters) -The European Commission has asked the Czech Republic to postpone signing a contract with South Korea’s KHNP worth at least $18 billion to build new nuclear power blocks as it investigates the use of foreign subsidies, an EC spokesperson said on Monday.
After a complaint from losing bidder EDF of France, the request adds another potential hold-up to the nuclear power tender – the Czech Republic’s biggest public procurement as it moves to replace coal and ageing nuclear units.
The spokesperson confirmed the letter from Commissioner for Industrial Strategy Stephane Sejourne, which was first reported by Czech news agency CTK.
“We are raising concerns under the rules of the foreign subsidies regulation regarding the South Korean bidder,” the spokesperson said in a daily briefing shown online, adding there was no timeline for the probe.
“We are not at the stage where we are opening an in-depth investigation, and I would not pre-judge if we are going there or not.”
A Czech regional court has already temporarily blocked a unit of electricity firm CEZ, in which the Czech state has a majority, from signing a contract with KHNP until the court handles a complaint from EDF related to the tender process.
CEZ had wanted to sign contracts with KHNP on May 7 following anti-monopoly office clearance. The state and CEZ have insisted KHNP’s offer was superior to EDF’s.
News agency CTK quoted Czech Prime Minister Petr Fiala as saying that while the letter was from the commissioner, it did not represent the EC’s official position and had no binding effect.
KHNP said it had “faithfully and responsibly” participated in the bidding process.
The CEZ subsidiary EDU II, set up to build the plant, said in a statement EDF’s complaint was speculative as it did not know the KHNP offer, and called on EDF to publish its own bid.
The government agreed last month to take an 80% stake
in EDU II from CEZ to ease the utility’s financial burden. CEZ will keep the remaining 20% and oversee the construction of the plant.
“We believe that the unsuccessful bidder is not interested in winning the tender, but in ensuring that no nuclear power plant is built here in the Czech Republic at all,” EDU II said.
CEZ has said it would seek damages from EDF caused by delays, which potentially threaten the 2036 completion date for the first of the two planned 1,063 megawatt units.
(Reporting by Jason Hovet in Prague, Benoit Van Overstraeten in Paris, and Hyun Joo Jin in Seoul, Editing by Louise Heavens, Kirsten Donovan and Richard Chang)
