PRAGUE (Reuters) -The European Commission has asked the Czech Republic to postpone signing a contract with South Korea's KHNP to build new nuclear power blocks, Czech news agency CTK reported on
EU Concerns Delay Czech Nuclear Power Contract with KHNP
PRAGUE (Reuters) -The European Commission has asked the Czech Republic to postpone signing a contract with South Korea's KHNP worth at least $18 billion to build new nuclear power blocks as it investigates the use of foreign subsidies, a spokesperson said on Monday.
After a complaint from losing bidder EDF of France, the request adds another potential hold-up to the nuclear power tender - the Czech Republic's biggest public procurement as it moves to replace coal and ageing nuclear units.
The spokesperson confirmed the letter from Commissioner for Industrial Strategy Stephane Sejourne, which was first reported by Czech news agency CTK.
"We are raising concerns under the rules of the foreign subsidies regulation regarding the South Korean bidder," the spokesperson said in a daily briefing shown online, adding there was no timeline for the probe.
"We are not at the stage where we are opening an in-depth investigation, and I would not pre-judge if we are going there or not."
A Czech regional court has already temporarily blocked a unit of electricity firm CEZ, in which the Czech state has a majority, from signing a contract with KHNP until the court handles a complaint from EDF related to the tender process.
CEZ had wanted to sign contracts with KHNP this month following anti-monopoly office clearance. The state and CEZ have insisted KHNP's offer was superior to EDF's.
The Czech Industry Ministry did not immediately comment. KHNP said it had "faithfully and responsibly" participated in the bidding process.
CTK cited CEZ chief executive Daniel Benes as saying the Commission's letter was from May 2 and that the French group was "doing anything" to prevent the plant from being built.
CEZ has said it would seek damages from EDF caused by delays, which potentially threaten the 2036 completion date for the first of the two planned 1,063 megawatt units.
The Czech government last month agreed to take an 80% stake in CEZ subsidiary EDU II, which was set up to build the new units, to ease the financial burden on the electricity firm.
(Reporting by Jason Hovet in Prague, Benoit Van Overstraeten in Paris, and Hyun Joo Jin in Seoul, Editing by Louise Heavens, Kirsten Donovan)
