The European Union has decided not to investigate alleged violations of its foreign subsidy rules in connection with the Dukovany nuclear power plant in the Czech Republic. The Dukovany project is the first nuclear power plant won in the Czech Republic by Team Korea, led by Korea Hydro & Nuclear Power (KHNP), and is a large-scale project with a total project cost of approximately 26 trillion won.
KHNP said Tuesday that it had "received official notification from the European Commission (EC) that it will not launch an in-depth investigation under the EU's foreign subsidy regulations in connection with the Czech Dukovany nuclear power plant project."
Earlier, Électricité de France (EDF), which lost out to KHNP in the competition, had filed an objection with the EC, arguing that the Dukovany project violated the EU's foreign subsidy rules. In response, the EC had been conducting a preliminary review on its own authority since February last year to determine whether it was necessary to launch a formal investigation procedure by accepting EDF's claims.
The EU regulates and views as unfair competition the practice of non-European companies acquiring European firms through mergers and acquisitions (M&A) or participating in public tenders while receiving excessive subsidies from governments or public institutions. On this basis, EDF argued that the Korean government was effectively providing subsidies to KHNP, thereby distorting competition. KHNP countered that it receives no subsidies from the government, and that the Czech nuclear project is not subject to the regulation because its bidding began before the rule was established. After about one year and four months of review, the EC concluded that KHNP's reasoning was valid and decided not to proceed with additional procedures.
"The EC decided not to launch an in-depth investigation thanks to KHNP and Team Korea faithfully submitting relevant materials and explaining necessary matters, cooperating sincerely in the preliminary review process," a KHNP official said. "KHNP plans to focus its capabilities on carrying out the Dukovany nuclear power plant project without disruption, working closely with the Czech client going forward."
Kim Jung-kwan, Minister of Trade, Industry and Energy, stressed through his Facebook account that "this decision carries great significance in that it is an official judgment made by the EU after directly reviewing the relevant matters," adding that it "confirms that KHNP and Team Korea have pursued the project while faithfully complying with international norms and the EU's laws and systems."
