May 9 (UPI) -- South Korea's Trade, Industry and Energy Minister Ahn Duk-geun flew to the Czech Republic Tuesday to attend a contract signing ceremony for a new nuclear power plant.
Czech utility firm CEZ was slated to ink the deal, worth at least $18 billion, on Wednesday under which South Korea's state-run KHNP would build two nuclear reactors in the East European country.
However, the event was abruptly canceled after a Czech court issued an injunction, blocking CEZ from closing the deal until the complaint from the losing bidder, France's EDF, is resolved.
The court's rationale was that if the deal were concluded now with KHNP, EDF would not have the chance to win the contract even if the court later ruled in its favor. Despite the legal challenge, observers in South Korea project that the Czech Republic will ultimately opt for KHNP to ensure its long-term energy security.
"EDF seems desperate because it is losing a nearby market," Kyung Hee University professor Chung Bum-jin told UPI. "Korea won the race on technological merit. Hence, the contract is highly likely to go forward."
"The success in South Korea's flagship export project in the United Arab Emirates demonstrated its capability to finish nuclear construction on time and within budget. That's exactly what the Czech government wants," he said.
Last year, KHNP and its mother company KEPCO completed the construction of four nuclear reactors in UAE's Barakah region. The overall project faced only minor delays, compared to multi-year setbacks seen in some EDF projects.
KAIST professor Choi Sung-min agreed.
"KHNP is competitive in both pricing and construction speed. That's why the Czech government is eager to wrap this up," he said in a phone interview. "I don't expect the legal process to take very long."
Indeed, following the court decision, Czech Prime Minister Petr Fiala stated on the social platform X that the bidding process had been fair and legal.
"The key factor in selecting the supplier was ensuring a sufficient supply of affordable electricity for citizens and businesses, along with the best guarantees," he wrote. "I believe the court understands the full contexts and risks and will decide quickly."
Earlier this week, state-backed CEZ insisted that the tender was fully transparent in all phases, vowing to seek damages if EDF loses in the legal battle.
"KHNP submitted the most outstanding proposal in all aspects," CEZ CEO Daniel Benes told a press conference in Prague on Wednesday.
The Czech antitrust watchdog UOHS has also backed CEZ's selection of KHNP.
Last July, CEZ named KHNP as the preferred bidder to construct two 1,000-megawatt units at the Dukovany nuclear complex. It marked KHNP's first project in Europe.
Westinghouse originally took part in the competition, but the U.S. company withdrew early, leaving KHNP and EDF in a head-to-head battle.
Against this backdrop, Daishin Securities analyst Heo Min-ho predicted that the litigation would come to an end in the not-so-distant future.
"If the court lifts the injunction, the project may face a delay of a few weeks or months. But KHNP is still predicted to close the deal later this year," he said. "It seems unlikely that EDF will win the case."
Construction on the Dukovany project is scheduled to begin in 2029 and finish by 2037. In addition to KHNP, many other companies like Daewoo E&C and Doosan Enerbility joined the Korean consortium.
When contacted, KHNP officials declined to comment.
