Minister of Trade, Industry and Energy Ahn Deok-geun actively refuted the opposition party’s claim that the Korean government promised financial support for the construction of a new nuclear power plant in the Czech Republic, saying, “It is not true at all.” Regarding the East Sea deep-sea oil and gas field development project (Blue Whale), a battle with the opposition party continued over issues such as ‘exemption from preliminary feasibility study’ and ‘possibility of success’.
Minister Ahn, who attended the government audit of the Ministry of Trade, Industry and Energy by the National Assembly’s Trade, Energy, Small and Medium Venture Business Committee on the 7th, asked Rep. Kim Jeong-ho of the Democratic Party of Korea, “Didn’t you submit a letter of intent (LOI) containing financial support when bidding for a nuclear power plant in the Czech Republic?” In response to an inquiry, he said, “LOIs are customarily sent in these projects,” and added, “The previous government also sent seven letters of intent (with similar content) to nuclear power plant-related projects, and our government also sent eight.”
When Rep. Kim ended the question without giving him a chance to answer, Minister Ahn was given the floor by the chairman and read the original text of the LOI written in English. After reading the part that said, ‘This letter does not mean a commitment to provide funds for the new nuclear power plant construction project in the Czech Republic,’ he emphasized, “The LOI clearly states that it does not provide financial support for the project.” did it
Representative Kim also argued that ‘Korea gains little benefit from participating in the Czech nuclear power plant project’ based on analysis data on the internal rate of return (IRR) of Czech nuclear power plants prepared by the European Union (EU). IRR refers to the rate of return at which the present value of the expenditure required for an investment is equal to the present value of the cash income expected from the investment. The data included that the Czech government proposed an IRR of 9 to 11% for the second Dukovany nuclear power plant, but that in a ‘realistic scenario’ where construction costs are increased by 10%, the IRR would drop to 7.2%.
Minister Ahn countered, saying, “This is completely wrong.” He said, “The EU was talking to the effect that the IRR is low when Czech nuclear power plant operators operate the electricity business,” and added, “Because we provide engineering, procurement, and construction (EPC) projects to build Czech nuclear power plants, it has nothing to do with IRR.” “There is none,” he said.
The opposition party’s criticism of the blue whale project and Minister Ahn’s rebuttal continued. When Rep. Kim Seong-hwan of the Democratic Party of Korea pointed out that ‘576.1 billion won will be invested over 5 years as the total project cost, we must receive a pre-trial’, Minister Ahn said, “The drilling scheduled for this December is mandatory drilling conducted by Korea National Oil Corporation, which currently holds the mining concession, and is a pre-trial.” “It is not a target,” he explained.
The government and Korea National Oil Corporation plan to drill at least five boreholes over the next five years. Rep. Kim Seong-hwan argued that if all of this is added up, more than 500 billion won of project cost will be invested, so it should be subject to preliminary approval. Minister Ahn’s answer was to the effect that just as each section is viewed as an individual project when constructing sections A to E of an urban railway, the Blue Whale Project should also view project costs differently for each drilling section.
Minister Ahn said, “After the first hole drilling is completed, we plan to establish a new mining concession, and we have also changed the mining system.” He added, “After the first hole drilling is completed, a new mining concession is established and foreign investment is attracted. If a new business is started, the investment situation will be considered. “If necessary, we plan to discuss preliminary data with the Ministry of Strategy and Finance,” he said.
Sejong = Reporter Soon-gu Jeong soon9@donga.com
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2024-10-08 02:57:51