Thursday, 24 April 2025
The chairman of the Office for the Protection of Competition, Petr Misna, confirmed the initial ruling from October 2024 that EDF could not object under the terms of the Public Procurement Act because “in the case under investigation, the contracting authority Dukovany Power Plant II proceeded on the basis of the safety exception” to the act.
In a the watchdog added: “In another part of the application, EDF alleged violations of the Foreign Subsidies Regulation and non-compliance with the 3E principles. The Office dismissed this part of the application as it does not have the power to review compliance with the Foreign Subsidies Regulation or the principles of economy, effectiveness and efficiency.”
The statement continued: “In its appeal, EDF sought to argue that the Office also had the power to review the contracting authority’s conduct in the context of the award of a public contract outside the award procedure on the basis of an exemption, alleging, for example, non-compliance with the fundamental principles of public procurement, in particular in relation to the selection of the preferred supplier – Korea Hydro & Nuclear Power Co Ltd – and also, for example, the substantial extension of the subject matter of the contract, the inability of the preferred supplier to perform the contract, as well as certain procedural errors by the Office.”
Misna said: “The law does not provide for the possibility to file objections against such acts of the contracting authority, as it is a procedure outside the award procedure … if it is not possible to file objections, one of the basic prerequisites for filing objections, without which it cannot be considered on its merits, is not fulfilled. Therefore, the Office is clearly not entitled to review a contracting authority’s compliance with the principles when proceeding outside the award procedure.”
He added that EDF could file an appeal with the regional court against the watchdog’s decision.
The Office for the Protection of Competition (UOHS) also officially closed the Westinghouse proceedings, after it withdrew its appeal against the same selection decision.
It had been intended that contracts for the first unit would be signed by the end of March 2025, but the appeals process has taken longer than expected – UOHS said one reason was “the need to deliver documents to the Republic of Korea by standard postal services. Each of these communications involved a prolongation of the proceedings for more than one month”.
It added that, once the decisions come into force, “the prohibition to conclude a public procurement contract no longer applies”.
The background
The Czech Republic currently gets about one-third of its electricity from the four VVER-440 units at Dukovany, which began operating between 1985 and 1987, and the two VVER-1000 units in operation at Temelín, which came into operation in 2000 and 2002.
In October 2023, Westinghouse, EDF and KHNP submitted binding bids for a fifth unit at the Dukovany nuclear power plant, and non-binding offers for up to three more units – another one at Dukovany and two at the Temelin nuclear power plant. Westinghouse was proposing its AP1000, EDF was proposing its EPR1200 reactor, KHNP was proposing its APR1000. But in February 2024 the Czech government announced it was changing the tender to be binding offers for four new units, with Westinghouse not included because it “did not meet the necessary conditions”.
Prime Minister Petr Fiala explained at the time that the decision to switch to binding offers for all four units was the result of the original tender suggesting that contracting for four units, rather than having separate processes, could have a 25% benefit in terms of costs.
In July, he announced KHNP as the preferred bidder, with contract negotiations to begin with the aim of signing contracts for the initial unit by the end of March 2025 – the target for test operation of the first new unit is 2036 with commercial operation in 2038. He said the winning tender “based on the evaluation of experts, offered better conditions in most of the evaluated criteria, including the price”. The KHNP bid was for a cost of around CZK200 billion (USD8.6 billion) per unit, if two units were contracted.
