Audit Finds Overlapping Roles Between KEPCO and KHNP in Nuclear Export Projects

SEOUL, May 7 (Yonhap) -- Korea Electric Power Corp. (KEPCO) and Korea Hydro & Nuclear Power Co. (KHNP) failed to cooperate properly on nuclear power plant export projects, resulting in overlapping expenditures and other inefficiencies, the Board of Audit and Inspection said Thursday.

The two firms have been performing overlapping functions in nuclear power exports, each operating a large workforce dedicated to the business, the audit found. KEPCO had 567 people at 10 departments dedicated to nuclear power export business.

The lack of cooperation between KEPCO and KHNP resulted in overlapping expenditures and other inefficiencies. In particular, the two companies failed to share information, technology or personnel, resulting in inefficiency in the course of bidding and negotiating processes of overseas nuclear power plant projects.

Their lack of cooperation could have even harmed national credibility, the Board of Audit and Inspection said. KEPCO and KHNP had a high-profile legal dispute over additional construction costs for the Barakah nuclear power plant project in the United Arab Emirates. Specific instances highlighted in the audit illustrated the breakdown.

KEPCO refused to share information on the cost of the UAE project when KHNP was working on a project in the Czech Republic. KHNP unilaterally withdrew personnel loaned for KEPCO's UAE project. KHNP responded lukewarmly to KEPCO's request for technology and personnel for a Saudi Arabia project.

The Board of Audit and Inspection suggested that KEPCO and KHNP sign a memorandum of understanding specifying criteria for cooperation and strengthen coordination through a joint nuclear power export council. The audit comes against the backdrop of the companies' strained relationship stemming from their joint work on the Barakah project in the United Arab Emirates.

That earlier legal dispute over construction costs had already drawn public attention to tensions between the two state-linked entities responsible for South Korea's nuclear export ambitions.

By maintaining separate large teams and failing to coordinate, the companies duplicated efforts that the Board of Audit and Inspection determined wasted resources at a time when efficient execution is critical for winning future international contracts.

The recommendation for a formal memorandum of understanding and a joint council aims to prevent recurrence by establishing clear rules and a permanent coordination body.