Brno court blocks completion of Dukovany tender – what happens now?
The plan to build two new nuclear units at the Dukovany power plant in the Vysočina Region has now been stalled, as the Regional Court in Brno on Tuesday blocked the signing of the final contract with a preliminary injunction. This was done in response to a lawsuit by the French energy company EDF, who unsuccessfully bid for the tender.
The construction of two new nuclear units for the Dukovany power plant is a major project of the Czech state. The first unit is planned to be completed and ready for operation by 2036. Three foreign companies submitted bids for the tender back in 2023: the American company Westinghouse, South Korea's KHNP, and France's EDF. The following year, it was announced that the Czech government would award the contract to KHNP, who calculated the costs of their plan of construction at 400 billion crowns at current prices. Ever since that decision, however, one of their competitors, EDF, has been challenging it.
Last month, the Office for the Protection of Economic Competition dismissed EDF’s appeal, agreeing that the selection of KHNP in the Dukovany nuclear tender had been conducted properly. Yet now the project has hit as a major obstacle: a preliminary injunction, issued on Tuesday by the Regional Court in Brno, in response to EDF’s challenge. With the injunction in force, the final signing of the contract is postponed indefinitely.
Jaroslav Míl, former government commissioner for nuclear energy and a minority shareholder of the Czech energy company ČEZ, spoke about the motivations behind the injunction:
“The arguments that the court presents are more or less formal in nature, because serious harm and negative consequences threaten every unsuccessful supplier. In any competition, that means that we would then have to actually judicially review every decision for any tender in this country, which is unrealistic. It was to be expected that the unsuccessful bidder would complain ... They simply cannot admit on principle that their bid was worse, because the managers who were responsible for it would undoubtedly have a big problem within their company.
“But the important thing is that we played into it … Czechia, or ČEZ, could have organised the tender so that the contract would actually be signed, as planned, in August 2023.”
So, what comes now? Those on the Dukovany side are convinced of the correctness of the tender, and will likely file a cassation complaint against the court’s decision. Not only EDF but also the winner of the tender, KHNP, have stated in response to the court's decision that they are ready to defend their interests with all legal steps. According to EDF, the preliminary injunction will provide time to assess a possible violation of its rights. KHNP has also stated that it respects the measure, but at the same time has reaffirmed its view that the tender was fair and transparent.
Daniel Beneš, CEO of ČEZ, on Wednesday told journalists that the financial damage caused by postponing the final agreement may reach hundreds of millions of crowns, depending on the duration of the delay. He also believes that the court will eventually agree with the correctness of the tender, after which ČEZ may seek damages from EDF.
