The Czech Republic is managing to address a notoriously difficult public procurement process at this very moment. Their intent is to fulfill commitments to retire coal and upgrade aging nuclear plants. The outcome of this ambitious project is likely the country’s largest public procurement effort to date and has massive implications for the country’s energy future.
CEZ, a 70 percent majority state-owned electricity company, is the central player in this IGAs procurement process. Competing for the contract are two notable bidders: KHNP, a South Korean company, and EDF, a French energy giant. The competition has intensified following EDF’s recent complaint regarding potential foreign subsidies associated with KHNP’s bid.
The European Commission’s Commissioner for Industrial Strategy, Stephane Sejourne, has intervened in the matter, highlighting concerns about the fairness of the bidding process. A spokesperson for the European Commission confirmed this intervention, stating, “We are raising concerns under the rules of the foreign subsidies regulation regarding the South Korean bidder.”
In the wake of this intensive review, a Czech regional court has temporarily stopped CEZ from concluding any deal with KHNP. As a result, the court has ordered that CEZ must deal with EDF’s objection to the tender process before moving forward. This legal maneuver represents one more complication in what is already a complicated bidding environment.
As a result of EDF’s complaint, EDU II, a CEZ subsidiary charged with constructing the new nuclear plant, filed their own notice of complaint. They’ve been pressuring the French company to release its own bid. EDU II discounted EDF’s concerns as speculative. They continue to claim that these concerns mischaracterize the actual bidding process realities.
KHNP believes it has followed all bidding requirements. The company maintains that every step it took throughout the procurement process was appropriate.
Even with these developments the timeline for the European Commission’s full investigation is still unclear. The result might have a huge effect on the bidders themselves. It would significantly change the Czech Republic’s energy landscape, as the country is trying to curtail its population’s heavy dependence on coal.