KEDO has, for the time being, eliminated the shortfall in its funding thanks to contributions from supporting countries.
On 23 May, South Korea's Sun-Sup Chang, the executive board's chairman, said that the agreement to cover the 8% deficit in monthly expenses was one of the organisation's main accomplishments of the last year.
KEDO spokesman Marc Vogelaar said that the funding problem arose from the way the financial burden-sharing was formulated in 1998. Under that arrangement, South Korea agreed to finance 70% of the cost of the project, with Japan providing 30% for two years, after which its support would drop to 22%.
Now that the initial two-year funding period is over, other countries are expected to fill in the funding gap created by Japan's reduction, and have done so for the current period. There has been new support from the EU, Australia, Canada, New Zealand, Singapore, Finland, Thailand, Qatar, and Poland.
Chang also noted the recent signing of a contract with Doosan Heavy Industry & Construction and a Hitachi-Toshiba consortium to supply the turbine generators. GE, which is the supplier for the project's reference plants Ulchin 3 and 4, has said that it would not provide them for the North Korean LWRs without specific US government liability guarantees. Vogelaar said that GE was concerned about its liability, and was generally "not keen" on supplying equipment for the North Korean units.
Liability is a key outstanding issue. Vogelaar said that earlier this year, KEDO had given North Korea a draft liability document that had been drawn up by the KEDO countries among themselves. A continuing complication was the difference among KEDO members as to which liability convention they favoured. US subcontractors insist that North Korea should adhere to the Convention on Supplementary Compensation for Nuclear Damage, while many others argue strongly for the Vienna Convention.