(LEAD) Daewoo E&C seeks gov't mediation in dispute over Czech nuclear project

(ATTN: UPDATES with details in paras 4-5)
By Kim Eun-jung

SEOUL, Nov. 2 (Yonhap) -- Daewoo Engineering & Construction (E&C) Co. said Monday it has asked the government to mediate a dispute with South Korea's state-run nuclear power operator over a major nuclear reactor project in the Czech Republic.

The company, which leads a construction consortium for the project, made the request to the Ministry of Trade, Industry and Resources after receiving formal notice Friday that Korea Hydro & Nuclear Power (KHNP) Co. had ended contract negotiations.

"We have requested the ministry's mediation to resume contract negotiations and normalize the project as soon as possible," Daewoo E&C said in a statement.

But the ministry said it has not received any official request from the company for the mediation.

"The government has urged KHNP and the Daewoo E&C consortium to proceed smoothly with negotiations to honor its commitment to the Czech Republic. However, it has no legal authority to mediate negotiations between companies with commercial interests at stake," the ministry pointed out.

The Dukovany project, valued at about 25 trillion won (US$17.5 billion), involves the construction of two 1,000-megawatt APR1000 nuclear reactors, a South Korean-designed model, in the Czech Republic.

Daewoo E&C said KHNP unilaterally ended the negotiations after rejecting its revised proposal submitted Thursday, citing the company's failure to adequately reflect rising construction costs.

The builder argued it was unreasonable to require a construction contractor, which is not responsible for reactor design, to bear additional costs and risks associated with building the APR1000 model in Europe for the first time.

KHNP said earlier it plans to launch a new tender to select a construction contractor in July 2027, with construction scheduled to begin four months later.

ejkim@yna.co.kr
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