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By Mark Hibbs

August 14, 1998

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EU Officials Deny Deal on KEDO

DPRK Reactor Delay Would Block ROK Reprocessing

 

 

EU Officials Deny Deal on KEDO

 

Officials from the European Union (EU) said the EU has not agreed to share with the U.S. the outstanding costs of the project to build two nuclear reactors in the Democratic People's Republic of Korea (DPRK), despite press reports of a deal circulating in South Korea and Japan last week.

EU representatives on the board of the Korea Peninsula Energy Development Organization (KEDO) agreed in late June to KEDO's internal agreement on cost sharing for the $4.6-billion project. KEDO officials have said that the agreement would finalize the cost-sharing arrangement once it is officially approved by the EU, the U.S., South Korea, and Japan. KEDO has declined to give details on how the rump costs for the project, said to be about $350-million, are to be paid for.

But the EU officials denied news reports in Japan and the Republic of Korea (ROK) last week which stated that the U.S. and the EU had together agreed to pick up the tab for the roughly $350-million not covered by existing funding commiments from Japan and the ROK. The officials stated that no such agreement had been made by Brussels so far.

The KEDO agreement will be submitted to the EU's Committee of Permanent Representatives (COREPER) for consideration. If accepted, it will for approval to the Council of Ministers in Brussels. But EU officials made clear that the issue of allocating funds for building the North Korean reactors is quite controversial within key European states, since their national nuclear policy bureaucracies are oppose aiding the nuclear program of a country which has been in defiant noncompliance with its IAEA safeguards agreement since 1994.

 

European industry sources added that the EU would only consider agreeing to paying more for the KEDO project if European industry is given certain reactor sub-contracts, which are also coveted by firms in South Korea and Japan.

The only official EU funding decision on KEDO this year was a recent European Parliament (EP) agreement to free up an already budgeted allocation of 15 million Ecu for 1998. The EP, which held up the allocation in early 1998 to ask questions about how the money would be used, released this funding to KEDO last month after the European Commission affirmed that the money would be earmarked only for administrative and technical assistance, and would not be used to pay for DPRK reactor construction.

 

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DPRK Reactor Delay Would Block ROK Reprocessing

 

A widely expected delay in construction of two reactors in the Democratic People's Republic of Korea (DPRK) would likely prevent the Republic of Korea (ROK) from making a decision to reprocess its spent reactor fuel in France or Britain and then repatriate the separated plutonium to burn in South Korean reactors, according to Korean officials.

According to the 1994 Agreed Framework to build two reactors in the DPRK, the new U.S.-design reactors are supposed to be completed by 2003. But market analysts who watch the Korea Electric Power Corp. (KEPCO), the leading industrial company in the reactor project, the Asian financial market does not believe the two reactors will be finished before 2010, given delays in implementation to date as well as political, technical and financial hurdles yet to be overcome.

KEPCO is running out of storage space for spent fuel at its reactor sites in South Korea, and must decide on a new solution by 2006. KEPCO management prefers the reprocessing and plutonium use option.

 

But South Korean officials fear that if the DPRK's new reactors are not finished or close to finished by 2006, a decision to reprocess KEPCO's spent fuel would precipitate a crisis, potentially leading the DPRK to suspend or cancel the reactor project and restart its own reprocessing program. That had been "frozen" by the Agreed Framework in 1994.

 

The alternative for KEPCO would be dry storage of the spent fuel elsewhere in South Korea, but for political and legal reasons, licensing new storage sites for the fuel would be very difficult to undertake.

Nuclear Watch is written exclusively for Global Beat. Mark Hibbs is European Editor of Nucleonics Week and Nuclear Fuel, leading specialist newsletters on international nuclear affairs, published by McGraw-Hill, Inc. Hibbs, based in Bonn, Germany, covers nuclear energy and proliferation problems in Europe, the former Soviet Union, and Asia.

Mark Hibbs' coordinates:
Tel: x49-228-215051
Fax: x49-228-218849
E-mail: mhibb@mh.com

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