Chinese Company Denied Participation in Wando-Jeju Undersea Cable Construction Project

[Asia Economy Reporter Moon Chaeseok] Chinese companies have been excluded from participating in the bidding for the 'Wando~Jeju Section No. 3 Extra High Voltage Direct Current (#3HVDC) Submarine Cable Construction Project' commissioned by Korea Electric Power Corporation (KEPCO). Last month, controversy arose to the extent that a petition against the participation of Chinese companies was submitted to the Blue House, following claims that KEPCO was considering allowing Chinese companies to participate in the project.

On the 1st, KEPCO announced the bidding for the related project on the electronic procurement system. Eligibility to participate in the bidding was limited to countries that are members of the World Trade Organization (WTO) Government Procurement Agreement (GPA). The GPA is an agreement aimed at opening government procurement markets to the outside world and enhancing transparency. It applies national treatment and international open competitive bidding to procurement agencies granted market access, but China is not a member of the WTO Government Procurement Agreement.

Additionally, eligibility is restricted to companies that, as of the bid application deadline, have designed, manufactured, and delivered XLPE HVDC submarine cables of 150kV or higher and 200MW or more within the past 10 years, have at least one year of operational experience, and hold licenses for electrical construction and information and communication construction businesses.

Earlier, controversy grew when it became known, mainly among cable manufacturers, that KEPCO was proceeding with the project as a national competitive bidding and was allowing Chinese companies to participate. It was reported that KEPCO had received a legal interpretation from the Ministry of Economy and Finance stating that Chinese companies could participate. KEPCO clarified, "While we requested a legal interpretation from the Ministry of Economy and Finance regarding the scope of bidder eligibility during the internal review process and received a response, it is not true that we obtained permission for Chinese companies to participate in the bidding."

Public criticism only intensified. The Blue House petition titled "Allowing Chinese companies to participate in KEPCO projects is unacceptable," which started on February 26, ended with 383,039 supporters after one month. Some internet communities spread rumors that "KEPCO is trying to sell out to China."