The Czech Republic competition authority has dismissed Électricité de France’s (EDF’s) appeal against the selection of Korea Hydro & Nuclear Power KHNP) to construct new nuclear power capacity at the Dukovany NPP.
The Czech Republic currently gets about one-third of its electricity from the four Soviet-supplied VVER-440 units at Dukovany and the two VVER-1000 units at the Temelín NPP. In July 2024, a South Korean consortium led by state-run KHNP was selected as the preferred bidder for the construction of up to four new NPP units in the Czech Republic. The other contender was Électricité de France (EDF). US-based Westinghouse Electric had been excluded from the tender in January, because it “did not meet the necessary conditions”.
The project involves the construction of up to four large nuclear reactors at the Dukovany and Temelín NPP sites, with two reactors (units 5&6) confirmed for Dukovany. The total project cost is estimated by the Czech Republic to be approximately CZK200bn ($8.85bn) per unit. The Czech Republic and KHNP plan to finalise the contract in 2025, aiming for completion of the first reactor by 2036.
However, the Czech Office for the Protection of Competition (ÚOHS – Úřad pro Ochranu Hospodářské Soutěže) in September 2024 received submissions from both Westinghouse and EDF challenging the procedure of the contracting authority, Elektrárna Dukovany II (part of power company ČEZ), in the tender. EDF requested that ÚOHS should overturn the bidding decision made by ČEZ, while Westinghouse raised issues related to national security exception clauses and its elimination from the bid.
“The complaint by EDF is primarily directed against the decision on the selection of the preferred supplier, and, therefore, requests the Office to determine that there has been a violation of the tender conditions and to cancel the acts of the contracting authority relating to the evaluation of the tenders,” ÚOHS said at the time.
ÚOHS Chairman Petr Mlsna, has now dismissed the appeal by EDF against his “first-instance decision in the case of the public contract of the contracting authority Elektrárna Dukovany II for the construction of a new nuclear power source”. In that decision in October 2024 ÚOHS said that “under the Public Procurement Act, it is not possible to file objections against a specific procedure of the contracting authority in the context of the award of a public contract outside the award procedure”.
ÚOHS added that, “in the case under investigation, the contracting authority Dukovany Power Plant II proceeded on the basis of the safety exception under Article 29(a) of the Public Procurement Act.” Therefore “the applicant did not have the possibility to raise objections and, consequently, did not have the possibility to submit an application to the Office.
In another part of the application, EDF alleged violations of the Foreign Subsidies Regulation and non-compliance with the principles of economy, effectiveness and efficiency (3E principles). ÚOHS dismissed this part of the application as it does not have the power to review compliance with the Foreign Subsidies Regulation or the 3E principles.
Mlsna agreed with the conclusions of the Appellate Commission and said ÚOHS had made a correct and lawful decision in the first instance. ÚOHS “is clearly not entitled to review a contracting authority’s compliance with the principles when proceeding outside the award procedure”. However, ÚOHS referred EDF to the possibility of judicial protection. EDF has the possibility to file an action against the Authority’s decision with the Regional Court in Brno.
Three other decisions related to the contract were also issued. In the first, the ÚOHS Chairman closed the administrative proceedings initiated at the request of Westinghouse Electric Company, “in view of the withdrawal of both the application and the appeal”. In the other two, the appeals against the decision on the participation of the preferred supplier KHNP in the administrative proceedings were dismissed.
The contracts for the first unit had been expected to be signed by the end of March 2025, but the appeals process took longer than anticipated. ÚOHS cited “the need to deliver documents to the Republic of Korea by standard postal services”. It noted that “each of these communications involved a prolongation of the proceedings for more than one month”.
