BUSINESS

Scandals may dent Korea’s drive to export nuclear plants

By Seo Jee-yeon
  • Published : Jun 23, 2013 - 20:40
  • Updated : Jun 23, 2013 - 20:40

Korea will launch a drive to export its nuclear power plants to Saudi Arabia by hosting minister-level talks between the two countries in Seoul on Monday for cooperation in the nuclear energy sector.

The repeated scandals revolving around the use of substandard parts supplied with forged quality certificates in several domestic nuclear reactors, however, may put a dent in the government’s nuclear plant export initiative ― one of the administration’s key economic policy agendas.

The number of local nuclear reactors involved in the use of faulty parts rose to 11 of the 23 reactors nationwide, the prosecution said last week.

At the closed meeting with Hashim A. Yamani, president of King Abdullah City for Nuclear and Renewable Energy, Korean Industry Minister Yoon Sang-jick is expected to pledge to support Saudi Arabia’s plan to build its nuclear power plant.

According to the ministry, Yoon will stress that the government is conducting a thorough investigation into the nuclear scandals and is to develop proper measures against the issue.

Despite the minister’s promise, industry watchers said Korea could face a bumpy road in exporting nuclear power plants to Saudi Arabia and other countries. Above all, they said, the parts scandal hampered the credibility of the nation’s nuclear power plants, one of the most important factors in the nuclear sector for exports.

Saudi Arabia, which plans to build 16 nuclear power reactors by 2030 from next year, has been one of Korea’s next target export destinations for made-in-Korea nuclear power plants following the United Arab Emirates in 2009. The ministry confirmed that Korea will join a bid for the first Saudi nuclear power plant project next year.

More imminently, the ministry is also worried about the impact on a bid for nuclear reactor construction in Olkiluoto in west Finland, which the state-run Korea Hydro and Nuclear Power Corp. joined by submitting a proposal this January.

Teollisuuden Voima, a Finnish company leading the project, is scheduled to announce multiple preferred bidders by the end of August. Ministry officials are no longer confident in the win after two local reactors were shut down in May over the use of faulty parts.

On top of the nuclear parts scandal, rising competition from Japan also puts a shadow on the nation’s ambition to export nuclear power plants, an analyst from E-Trade Securities said, lowering the target stock price of major nuclear power plant builders, including Doosan Heavy Industries and Daelim Industrial.

“As Japanese Prime Minister Shinzo Abe pushes hard for selling Japanese nuclear technologies overseas, Japan, armed with better fund-raising capability, emerges as one of the strongest competitors in a bid for overseas nuclear plant projects,’’ said Park Yong-hee of E-Trade Securities.

Japan won a $22 billion nuclear power plant project in Turkey in May this year, beating Korea. It is also competing with Korea for the Olkiluoto project in Finland, and seeking a cooperation deal with Saudi Arabia in the nuclear sector as part of its efforts to tap the Saudi nuclear plant projects.  

By Seo Jee-yeon (jyseo@heraldcorp.com)


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