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South Africa’s nuclear energy project is not likely to succeed

Why South Africa’s nuclear energy plan will likely fail By  January 5, 2016 South Africa will likely fail in its quest to develop its nuclear energy capacity, according to emerging markets economist Peter Attard Montalto of Nomura.

Montalto told Fin24 that if the 9 600 MW nuclear procurement programme does see the light of day, it will be a “slimmed down programme spread over a longer period of time, given the affordability issue”.

“For this reason we need to remain calm, but vigilant,” he said. “The end point remains uncertain.”…..

Questioning South Africa’s transparency, Montalto said the decision to gazette so close to Christmas strengthens the perception that the government has “signed non-public agreements with Russia” to award its state-owned company, Rosatom, the nuclear contract.

Rosatom prematurely announced it had won the contract in 2014, after President Jacob Zuma secretly visited Russia. It later retracted its statement and told Fin24 in 2015 that it was a public relations mistake.

Controversy over Rosatom’s announcement intensified after a local newspaper reported Zuma personally negotiated the deal with Russian President Vladimir Putin,” AFP reported in 2014.

Regardless of these perceptions, Montalto said, there needs to be more transparency on what advice National Treasury has provided and the sequencing of their advice compared to the process of moving to tender.

“I still believe no formal sign off on affordability under any financing option has been provided by National Treasury and indeed that it remains totally unaffordable under any financing model including vendor financing,” he said.

“The next steps are likely to be murky as tenders are requested and then submitted along with financing models.

“Parliament and the courts will likely be crucial through this stage in providing transparency,” he said. http://businesstech.co.za/news/energy/108051/why-south-africas-nuclear-energy-plan-will-likely-fail/

January 6, 2016 - Posted by | general

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