Korea Hydro CEO to Quit Once Nuclear Parts “Mess” Rectified

Korea Hydro & Nuclear Power Co.’s chief executive officer said he will quit once he has rectified “the mess” surrounding faked quality control certificates on components supplied to the company’s nuclear reactors.

“I will focus on rectifying the mess, and then will step down to take responsibility,” Kim Kyun Seop, CEO of the Seoul- based utility, told lawmakers in a hearing today in Seoul. “It’s important to clean up the wrongdoings that happened in the past.”

Korea Hydro, which operates the nation’s 23 nuclear reactors and provides a third of the country’s electricity, said it will tighten its audit of nuclear components after it alleged that eight suppliers had faked quality control certificates over the past ten years.

The company shut down two reactors at the Yonggwang nuclear plant on Nov. 5 in order to replace the parts. Knowledge Economy Minister Hong Suk Woo told lawmakers on the same day that the safety of the reactors wasn’t compromised as the components weren’t core to their operation. Korea Hydro aims to complete their replacement by the end of the year.

“The nuclear operator failed in controlling suppliers,” Jhung Han Kyung, electricity policy research head at Korea Energy Economics Institute in Uiwang, South Korea, said by phone. “It’s a different issue from whether the components would have a real impact on nuclear safety.”

Jhung said the shutdown could add as much as 300 billion won ($276 million) in costs for Korea Electric Power Corp. (KEP), Korea Hydro’s state-run owner and only customer for its electricity.

Investigation

Prosecutors are investigating Korea Hydro’s allegations of Nov. 2 that the eight suppliers, who haven’t been named, faked 60 quality control certificates on more than 7,000 components between 2003 and 2012, the Ministry of Knowledge Economy said on Nov. 5 in an e-mailed statement. Minister Hong said that day that seven of the suppliers were domestic and one was from the U.S.

The components, including fuses, switches and 230 other kinds of items, were valued at 820 million won, and 95 percent of them were manufactured in the Europe and the U.S., according to the statement. The suppliers forged the certificates, mainly from one unnamed overseas quality accreditation organization, of twelve used by Korea Hydro.

Some 98.4 percent of the components were installed at reactor units 5 and 6 at the Yonggwang nuclear plant, 310 kilometers southwest of Seoul. The rest were used at reactor units 3 and 4 at the Yonggwang plant, and at reactor unit 3 in the Uljin plant, 360 kilometers southeast of Seoul.

Minister Hong said there’s no plan to shut down the other reactors as the components could be replaced while the reactors are operating.

To contact the reporter on this story: Sangim Han in Seoul at sihan@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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