Audit Board Points Out Inefficiency in Dual Nuclear Export Structure of KEPCO and KHNP... Highlights 37.3 Billion Won in Dispute Costs

KEPCO Operates 216 Personnel, KHNP 567 Personnel in Separate Units

"Redundancy and Conflicts Arise"

Ministry of Trade, Industry and Energy Notified of 'Nuclear Power Plant Export Governance Reform'

The Board of Audit and Inspection of Korea has raised the need to reorganize the governance structure of Korea Electric Power Corporation (KEPCO) and Korea Hydro & Nuclear Power (KHNP), citing inefficiencies arising from the dual-track nuclear power plant export system. Dispute-related costs incurred during the UAE Barakah nuclear power plant project alone amounted to approximately 37.3 billion won.

According to the "Regular Institutional Audit Report on Korea Hydro & Nuclear Power" released by the Board of Audit and Inspection on May 7, KEPCO and KHNP have each operated their own nuclear power plant export functions, resulting in ongoing issues such as organizational and personnel redundancy and a lack of collaboration.

The Board of Audit and Inspection noted that, since 2016, the government has adopted a system that divides the roles of KEPCO and KHNP by country for nuclear power plant exports. However, during actual project implementation, a lack of information sharing and a dual-track decision-making structure led to inefficiencies.

Currently, KEPCO operates 216 personnel dedicated to nuclear power plant exports, while KHNP operates 567 personnel for the same purpose. The Board of Audit and Inspection pointed out that both organizations have maintained separate units with similar functions, leading to internal competition and overlapping work.

In particular, the UAE Barakah nuclear power plant project faced conflicts over additional construction cost settlements, resulting in international arbitration procedures. During this process, approximately 37.3 billion won was spent on legal consulting and litigation response. The Board of Audit and Inspection concluded that the formation of a "dual project management system" effectively led to reduced project efficiency.

In the Saudi nuclear power plant project, disagreements among organizations over the status of the main contractor caused difficulties in practical collaboration, and in the Czech nuclear power plant project, the Board of Audit and Inspection noted that experience and information from the UAE project were not sufficiently shared.

However, regarding the audit related to the agreement with Westinghouse, the Board of Audit and Inspection explained that it "took into account the impact on ROK-U.S. relations," and therefore concluded certain procedures.

The Board of Audit and Inspection notified the Ministry of Trade, Industry and Energy to review governance restructuring measures, including: codifying collaboration standards between KEPCO and KHNP; establishing a dedicated organization for nuclear power plant exports; and implementing a unified system centered on KEPCO.

This content was produced with the assistance of AI translation services.