Nuclear Energy Corporation of South Africa (Necsa) embroiled in dodgy deals, conflicts of interest
Radio-active legacy of Zuptoid nuclear interference – Yelland, BIZ News, By Chris Yelland, 3 Dec 18, Independent reports are being received by EE Publishers that energy minister Jeff Radebe has requested the Necsa board to provide reasons why it should not be removed, and that issues relating the Necsa chairman are central to this matter.
It appears that the issues raised by the minister with the board concern matters of governance, engagements with Russian nuclear interests and possible unauthorised research reactor deals with Russia’s Rusatom, overseas trips by the Necsa chairman, unauthorised media releases, articles and/or communications, and apparent conflicts of interest.
Formal questions have been put to Minister Radebe, to Necsa chairman Dr Kelvin Kemm and to Necsa CEO Phumzile Tshelane, including a request for confirmation as to whether the reports being received are correct or not……
Necsa is the Nuclear Energy Corporation of South Africa, a state-owned enterprise undertaking R&D and commercial activities in the field of nuclear energy and radiation sciences, and the production of medical nuclear radioisotopes and associated services. Necsa is also responsible for processing source material, including uranium enrichment, and co-operating with other institutions, locally and abroad, on nuclear and related matters.
Apart from its main activities at Pelindaba, near Pretoria in South Africa, which include operation and utilisation of the SAFARI-1 research reactor, Necsa also manages and operates the Vaalputs National Radioactive Waste Disposal Facility in the Northern Cape on behalf of the National Radioactive Waste Disposal Institute (NRWDI).
Over the last few years, Necsa has been embroiled in a number of debilitating operational, financial and governance challenges.
As a result of safety procedure lapses, Necsa’s NTP Radioisotopes plant, which produced a significant share of the world’s commercial medical nuclear radioisotope, Molybdenum-99, was shut down by South Africa’s National Nuclear Regulator (NNR) in November 2017, which lasted almost a full year. ………
It was announced in mid-November that the NTP Radioisotopes plant was back in operation after conditional approval to restart was given by South Africa’s National Nuclear Regulator (NNR).
NTP Radioisotopes normally has a revenue of about R1.3bn a year, providing a contribution of more than 50% to the revenue of the Necsa group. The closure of the NTP production plant for a year has therefore obviously had a devastating financial impact.
There are also wider concerns regarding the financial health of Necsa. The Auditor General (AG) has raised ongoing concerns about inadequate financial provisions by Necsa for decommissioning and dismantling (D & D) costs at the end-of-life of Necsa’s SAFARI-1 research reactor.
As a result, Necsa’s annual financial statements for the year ending 31 March 2018, which were due to be published by end September 2018, have still not been tabled.
Note: This article will be updated as further information comes to hand, and/or a response from energy minister Jeff Radebe is received. https://www.biznews.com/thought-leaders/2018/12/03/necsa-board-chairman-ceo-ropes-yelland
South Africa’s Portfolio Committee on Energy (PCE) praises Nuclear power, glosses over cost, waste, problems
IAfrica 29th Nov 2018 , Yesterday, the Portfolio Committee on Energy (PCE) delivered its report on
the Department of Energy’s (DoE) Integrated Resource Plan (IRP), to Parliament.
According to the Southern African Faith Communities’ Environment Institute (SAFCEI), Parliament has once again failed to act in the people’s best interest, stating that it found “no persuasive arguments against nuclear”. In the report – which was based on the public hearings on the IRP, held in October – the PCE was in no doubt that “nuclear technology is the cleanest, safest and cheapest technology.”
However, SAFCEI’s Energy Justice Coordinator, Vainola Makan says that during the public hearings, various issues with nuclear, were mentioned. Says Makan, “Over and above the high costs of building a nuclear power plant – which are often marred by delays and related cost overruns – there are further costs associated with maintaining and securing the plant, as well as dealing with waste.”
Makan, who recently held SAFCEI’s People’s Power Learning Fest says, “We are learning that none of the current nuclear waste disposal solutions are real solutions, because the radioactive waste will always be there, and it will always be a risk to all things living in the areas where they are buried. At Koeberg, for example, the concentration of high-level radioactive wastecontinues to increase, and there is still no clear plan for dealing with it.”
https://www.iafrica.com/public-outcry-at-disappointing-energy-planning-report-on-nuclear-to-parliament/
Doubts on future of South Africa’s nuclear research reactors, with glut of medical isotopes, and with particle accelerator production
The facility is the main supplier of medical nuclear radio-isotopes such as Molybdenum-99 in Africa, and one of only four such facilities globally. As a result of safety procedure lapses, the plant was shut down in November 2017, which lasted almost a full year. Several attempts had been made in the interim to restart the plant, but without success.
The process of rectifying shortcomings and bringing the operating and safety procedures in line with the requirements of the NNR has been marred by what appears to be conflict between NTP and its parent company, the Necsa……..
An investigation was held which resulted in the suspension of a number of NTP staff. Following a number of further senior executive and staff replacements, suspensions and reinstatements, Necsa placed its own employees in charge of the plant, who then attempted to rectify the problems and restart the production facility.
………Several incidents occurred which caused restarts to be halted or abandoned. One example that has been cited is the institution of various changes to parameters which were unrelated to the cause of problems. The reasons for Necsa’s actions in this regard are unclear……
following an announcement during the recent Brics Summit in Sandton of a cooperation agreement in the field of nuclear medicine between NTP and Rusatom, the nuclear medical subsidiary of Russian state-owned nuclear company Rosatom, there are some questions as to whether a second or replacement nuclear research reactor will be built.
NTP said that the current global production over-capacity of medical radio-isotopes does not justify a second nuclear research reactor, since the Safari-1 reactor at Pelindaba still has between 15 and 20 years of life, and this could be extended still further. The Safari-1 nuclear reactor produces medical nuclear radio-isotopes by bombarding target plates of low-enriched uranium with neutrons.
Furthermore, medical nuclear radio-isotopes can also be produced by particle accelerators such as cyclotrons, which could make the consDtruction of second or replacement nuclear research reactor unnecessary, the company said.
There are also concerns regarding the financial health of Necsa. The Auditor-General has raised ongoing concerns about inadequate financial provisions by Necsa for decommissioning and dismantling costs for the Safari-1 reactor end-of-life.
South Africa’s Public Enterprises Minister Pravin Gordhan’s evidence at the State Capture Commission
I WARNED ZUMA OF NUCLEAR PROCUREMENT IMPLICATIONS, SAYS GORDHAN https://ewn.co.za/2018/11/19/i-warned-zuma-of-nuclear-procurement-implications-says-gordhan
Public Enterprises Minister Pravin Gordhan says he advised former President Jacob Zuma that nuclear procurement would be a complex issue. Clement Manyathela 20 Nov 18 JOHANNESBURG – Public Enterprises Minister Pravin Gordhan has told the state capture commission that former President Jacob Zuma was determined to go ahead with the nuclear build programme despite the reality that the country could not afford it. Gordhan appeared before the inquiry on Monday in Parktown.
His interactions with the Gupta family are among other issues he is expected to deal with.
The minister says he advised Zuma that nuclear procurement would be a complex issue.
“I indicated to the former president that it would be lawful to follow procurement processes for such an expensive process to avoid being marred in scandals such as the arms deal.”
He says he wanted Zuma to be aware of the cost implications.
“I wanted to impress upon the former president that that undertaking, the nuclear procurement, required careful consideration of its costs, choice of supplier and due process.”
Last month, former Finance Minister Nhlanhla Nene told the commission Zuma was so determined to proceed with the nuclear build programme that he showed disregard and no appreciation for the financial ramifications for the country.
Gordhan will continue his testimony on Tuesday.
South Africa: leaked report shows Zuma government’s secret plans for nuclear power
GORDHAN’S LEAKED REPORT DETAILS BEHIND-THE-SCENES PLAN TO PROCURE NUCLEAR ENERGY https://ewn.co.za/2018/11/08/gordhan-s-leaked-report-details-behind-the-scenes-plot-to-procure-nuclear-energy– Lindsay Dentlinger 9 Nov 18 Former President Jacob Zuma was insistent the country needed to enter into a nuclear deal. CAPE TOWN – Public Enterprises Minister Pravin Gordhan has detailed the behind-the-scenes machinations for government to procure more nuclear energy.
It’s contained in a statement that Gordhan is expected to deliver to the Zondo Commission of Inquiry into state capture next week.
It was leaked to the media overnight.
In it, Gordhan says former President Jacob Zuma was insistent the country needed to enter into a nuclear deal.
As the Finance Minister at the time, Gordhan says he warned Zuma that the process had to be above board to avoid another arms-deal scandal.
Gordhan says it was at a meeting at the presidential residence with Zuma and one of his advisors Senti Thobejane in 2013, that the former president made it clear he wanted South Africa to procure nuclear power.
Gordhan says he was not told ahead of the meeting what would be discussed, but he impressed on Zuma that costs, choice of supplier, due process and likely challenges should all be considered.
He says Treasury raised concerns with a draft agreement with Russia because of the firm fiscal commitments it aimed to enforce.
During his tenure as Finance Minister, Gordhan says Treasury officials insisted that proper evaluations of the true cost of nuclear power, and financial risks to the country be carried out.
He says once he was moved to the portfolio of Cooperative Governance, he was no longer privy to discussions around the nuclear deal.
Gordhan says he was also not present at the Cabinet meeting in December 2015 when the deal was approved.
But he points out that it was on the same day that Zuma announced Gordhan’s successor as Finance Minister, Nhlanhla Nene, would be replaced by Des van Rooyen. A move that sent markets and the local currency into a tailspin and culminated in Gordhan’s reappointment to the post just three days later.
(Edited by Zamangwane Shange)
Nuclear corruption: former South African government planned to conceal costs on nuclear plan
State was willing to lie to SA over costs of Zuma’s nuclear plan, City Press News 24
Cabinet also decided to go ahead with the nuclear power deal on the grounds of hopelessly incorrect and over optimistic “facts” that the energy department presented to Cabinet – such as an assumption that the exchange rate would stay at R10 a dollar.
A top secret Cabinet notice and accompanying memorandum – which have now been declassified and were handed to the state capture commission last week, revealed for the first time how close South Africa was on the edge of an economic crisis, and how desperate Zuma and his cronies were to push through the nuclear power deal.
Last week, Finance Minister Nhlanhla Nene told the commission investigating the extent of state capture how Zuma chastised him because he wasn’t making quick enough progress over the nuclear deal.
During a state visit to Russia in July 2015, then minister of energy Tina Joemat-Pettersson wanted Nene to sign a one-page agreement.
It was a letter addressed to the Russian authorities, Nene said, adding that he couldn’t remember the precise details of the letter but he remembered that it effectively gave a guarantee to the Russian authorities over the nuclear programme, if they agreed to finance it.
Nene refused to sign it because it would have been catastrophic for the country, he said.
Zuma wasn’t impressed, because he wanted to be able to present something to President Vladimir Putin when they met.
A few months later, Joemat-Pettersson’s department was still forging ahead with the project, despite warnings from Treasury.
On December 9 2015, the day Cabinet approved the nuclear deal, Nene recalled been summoned into a meeting with then president Zuma. It lasted less than five minutes and he was informed that he was being removed from his role as finance minister.
He was replaced by Des van Rooyen, which set off a spiral of uncertainty for the markets.
The secret Cabinet notice showed that the government wanted to downplay the cost implications of the deal. Prices should not be communicated prior to the procurement process being completed, it said, and if any communication was to be done around the costs of the programme, it was decided to talk about the low end of the range……..
The numbers show that nuclear would have ruined South Africa
A nuclear engineer from a large Western nuclear power company, who also tendered for the project, told Rapport that the numbers were completely unrealistic.
The number of $2500 a kilowatt was from nuclear power stations being built in Asia – mainly China and Korea. It would be unrealistic to think that it would be possible to build a nuclear power station in South Africa at such a low price, he said.
“In South Africa, if everything goes according to plan, you could bank on it costing about $5000 per kilowatt,” he said.
Both the engineer and Serfontein said that, under the best circumstances, the project would cost more than R1 trillion.
If Cabinet had gone ahead with this binding agreement, it would have ruined South Africa financially, they both said………
At that time it was widely known that the Russian state-owned nuclear power company, Rosatom, would be the preferred bidder because Joemat-Pettersson had signed a framework agreement with Rosatom more than a year before, on September 22 2014, that would make the Russians the sole supplier for South Africa’s nuclear power programme.
Last year, the High Court set aside this agreement and framework agreements with other countries. https://city-press.news24.com/News/state-was-willing-to-lie-to-sa-over-costs-of-zumas-nuclear-plan-20181008
South African Finance Minister Nhlanhla Nene testified to the nuclear corruption in former South African regime
Nene refused to sign off on nuclear energy – and it cost him his job https://businesstech.co.za/news/energy/275039/nene-refused-to-sign-off-on-nuclear-energy-and-it-cost-him-his-job/ 3 October 2018 South African Finance Minister Nhlanhla Nene said he met repeatedly with members of the Gupta family, who have been implicated in a corruption scandal related to former President Jacob Zuma and separately was twice pressured to sign a multi-billion Russian nuclear-power deal by former Energy Minister Tina Joemat-Pettersson.
Nene made his comments in a statement accompanying his testimony at a judicial inquiry into allegations of corruption and so-called state capture which involve the Guptas, who are friends with the former president.
Nene denied wrongdoing in his meetings with the family and said he refused to sign the agreement for Russia to provide nuclear energy, a plan that had been publicly backed by Zuma.
President Cyril Ramaphosa came to power in February and has changed the top management at the likes of the revenue authority and the state power utility as part of his pledge to fight corruption. He reappointed Nene as finance minister, a move that helped bolster investor confidence after years of economic mismanagement and regular cabinet changes under Zuma.
Nene first served as finance minister until December 2015, when Zuma fired him, causing a plunge in the rand and bonds. Mcebisi Jonas, who was Nene’s deputy, told the commission the Guptas offered him a bribe to take over the finance minister post, which he declined.
Nene rejected pressure to approve the construction of as many as eight nuclear reactors, which would have the capacity to generate 9,600 megawatts of energy. The costs of the project, championed by Zuma, would have been “astronomical,” he said in his statement.
In July 2015, Nene twice refused to sign a letter from Joemat-Pettersson providing a guarantee to the Russian government on the nuclear program.
“As a result of my refusal to sign the letter, I was seen as the person standing in the way of the nuclear deal,” he said. “I was accused of insubordination, not only by the president but by some of my colleagues.”
South Africa not planning for nuclear power, as renewable energy costs go down
Instead, he says the country’s energy demands have decreased.
Briefing Parliament’s energy committee on Tuesday, Radebe also pointed out that the cost of renewable energy technology has also come down.
According to the draft IRP, nuclear energy will only account for about 4% of the country’s energy mix by 2030.
This means no nuclear build programme is being envisaged.
Radebe says there are some misunderstandings about the decision taken on nuclear energy.
“It is not in the plan together with a number of other technologies for the period ending 2030 due to lower demand and lower cost of other technologies.”
MPs say they are relieved a new nuclear project has been scrapped for now, because it is not only unaffordable but would open the door to corruption.
(Edited by Thapelo Lekabe)
South Africa can’t afford nuclear power expansion, but still open to nuclear deals with Russia
South Africa Opens Door to Future Russian Nuclear Power Deal, US News, July 26, 2018 , BY ALEXANDER WINNING, JOHANNESBURG (Reuters) – South Africa cannot afford large-scale expansion of its nuclear power capacity but would still be open to future deals with Russia, a senior ruling party official said on Thursday, shortly before the arrival of President Vladimir Putin for a summit.
Russian state firm Rosatom was one of the front runners for a project to increase South Africa’s nuclear power-generating capacity championed by former president Jacob Zuma.
South African President Cyril Ramaphosa has put nuclear expansion on the back burner since taking office in February, saying it is too expensive, and has focused instead on pledges to revive the economy and crack down on corruption.
African National Congress Treasurer General Paul Mashatile, one of the six most powerful members of the ruling party, said Pretoria would not rush into major nuclear investments but that it was still open to deals. ………
Russia wants to turn nuclear energy into a major export industry. It has signed agreements with African countries with no nuclear tradition, including Rwanda and Zambia, and is set to build a large nuclear plant in Egypt.
Rosatom signed a separate agreement with South Africa’s state nuclear firm on Thursday to explore joint production of nuclear medicines and other ways of harnessing nuclear technology, a statement from the two firms showed.
The agreement, which is non-binding and is not related to large-scale power generation, is a further sign that Rosatom is keen to cement its position on the African continent.
The deal will involve the construction of two small reactors and a commercial cyclotron to produce medical isotopes and radiopharmaceuticals at a facility near Pretoria. https://www.usnews.com/news/world/articles/2018-07-26/south-africa-cannot-afford-major-nuclear-expansion-top-anc-official
In South Africa, there’s confusion about the new government’s policy on matters nuclear
Nuclear energy: Ramaphosa’s mixed messages https://www.news24.com/Analysis/nuclear-energy-ramaphosas-mixed-messages-20180629 Ellen Davies and Saliem Fakir
December 2017 marked the beginning of significant political changes in South Africa. Former President Jacob Zuma was replaced by Cyril Ramaphosa as president of the African National Congress (ANC). On 14 February 2018, Zuma stepped down as president of the Republic of South Africa (RSA), almost one year short of completing his second and final term. He was replaced by the newly elected president of the ANC, Cyril Ramaphosa.
This has brought about significant changes in South Africa. However, what this means for Government’s nuclear energy ambitions is not yet clear. While the Zuma administration remained unwaveringly committed to the Nuclear Energy New Build Programme in its full 9.6GW glory, mixed messages about the future of nuclear energy have emerged from President Ramaphosa and his newly appointed Minister of Energy, Jeff Radebe.
Given this uncertainty, as well as the country’s questionable track record with pursuing nuclear energy procurement under the Zuma administration, those opposed to the nuclear new build programme are left in limbo.
Will government continue to pursue nuclear energy despite its prohibitively high costs; the lack of energy demand to justify a build on this scale; the fact that we don’t have the money to finance it; and the continued resistance from many constituencies throughout South Africa? If it does, will the procurement process be more open and transparent than it was under the Zuma administration and will government engage with and listen to the concerns of its people?
These are critical questions because the energy choices we make now will have significant impacts not only on our energy security and economic performance today but also in the future.
It is in this spirit that the World Wide Fund for Nature (WWF) undertook two studies to explore the future of nuclear energy in South Africa. The purpose of these studies is two-fold. First, it seeks to understand what we can learn from the decisions made and strategies pursued to push nuclear energy under the Zuma administration. Second, it seeks to highlight the potential points of intervention available to those seeking to oppose nuclear energy deployment, or at the very least ensure accountability in the procurement thereof.
The first study, South Africa’s nuclear new-build programme: Who are the players and what are the potential strategies for pushing the nuclear new-build programme, maps the most vocal constituencies in the nuclear energy debate and their reasons for either opposing or supporting the new build programme. What it reveals is that across the board, irrespective of ideological positions or technology preferences, South Africans are opposed to the nuclear programme. The reasons given by these commentators include, the prohibitively high costs involved, the lack of energy demand to justify the programme, the lack of finance to fund such a programme, the secrecy associated with nuclear procurement and the potential for corruption, among others.
The study also unpacks some of the lessons we can learn from government’s strategy to push the nuclear programme under the previous administration. Importantly, it unpacks the Earthlife Africa and Southern African Faith Communities’ Environment Institute (SAFCEI) legal challenge, which saw the Western Cape High Court declare Government’s Intergovernmental Agreement with Russia unlawful and what those opposed to nuclear energy can learn from this process. It attempts to understand what, given the High Court decision, are the strategies available to Government if it is to continue to pursue nuclear energy in South Africa.
The second study, South Africa’s nuclear new-build programme: The domestic requirements for nuclear energy procurement and public finance implications, provides insight into the various legislative requirements for large infrastructure builds in South Africa.
What it reveals is that SA has a robust legislative framework in place to ensure that due process is followed in large infrastructure procurement. In particular, Treasury’s various procurement rules impose a number of checks and balances to prevent cost overruns and delays and to ensure transparency and accountability. These are critical to understand, not only in the context of nuclear energy, but for any infrastructure build we might seek to undertake.
The second report also shows unequivocally that SA cannot afford to pursue the nuclear new build programme. Using very conservative cost estimates, it shows not only that the fiscus can neither finance the programme nor provide the guarantees necessary to seek financial support elsewhere.
Given this, and as we move into a new period in SA’s democracy, it is critical we entrench inclusive and accountable decision making from the get go. This requires that we ensure that government engages with and listens to all stakeholders when making important decisions about our energy future.
Going into this new period, we can draw on two fundamental lessons from our past. The first is that everyone has the power to make a difference. Against all odds, Earthlife Africa and SAFCEI, were able to change the course of our energy future. The second is that in order to exercise this power we need to be informed. The energy space is unnecessarily complicated. It is time for those working in this space, to move away from the technical language that excludes participation by most South Africans and start driving Energy Democracy in its truest form.
– Ellen Davies is the Project Manager of Extractives Industry at the World Wide Fund for NatureSaliem Fakir is the Head of the Policy & Futures Unit at the World Wide Fund for Nature South Africa.
This article first appeared on The Journalist.
Pelindaba nuclear facility in South Afric a has yet another nuclear safety scare
Whistleblowers have accused the South African Nuclear Energy Corporation of sidelining qualified staff in favour of inexperienced technicians.
Another safety incident has shaken the Pelindaba nuclear facility outside Johannesburg, resulting in the total shutdown of the NTP Radioisotopes plant which produces vital supplies of nuclear medicine and radiation-based products.
Senior NTP staff point fingers at parent company the South African Nuclear Energy Corporation (Necsa).
The sudden halt in production, which can be lifted only once the National Nuclear Regulator gives the all-clear, threatens global medicine supply.
AmaBhungane understands that the NTP facility was shut down after a dangerous spike in hydrogen gas levels was detected last Thursday (May 31). This, according to a senior technical employee, “could have resulted in an explosion”.
Necsa group chief executive Phumzile Tshelane, speaking on behalf of Necsa and NTP, ignored most questions put to him, saying: “We cannot disclose classified information.”
He did, however, attempt to downplay the incident. “This was a minor incident followed by vigilant safety protocols which ensured that there is no danger as alleged by your source.”
Tshelane cautioned against what he called “dangerous and alarmist allegations”.
This is the latest in a string of setbacks for NTP, the owner of the plant. In November last year, the plant was shuttered by the nuclear regulator after faulty calibrations in an instrument for analysing hydrogen levels.
Several employees claimed that since the November incident the new acting management brought in to get the plant restarted has bungled the recovery process and created unsafe work conditions.
The correspondence paints a picture of a breakdown of safety culture at the plant, where those working on returning the facility to full production are out of their depth.
In their communications with Necsa/NTP, the regulator flags among other things: the submission of falsified results; inaccuracies in tables submitted; the failure to demonstrate repeatability of tests; the unsuitability of a particular individual to provide theoretical training to NTP staff; a lack of due diligence in calibration; failure to submit hydrogen calibration schedules; and a repeated failure to address the poor quality of graphs.
In a letter from March, the regulator writes: “Noting the falsification of information, highlighted by the regulator… and recognising that that similar issue (sic) was previously raised by the regulator… Necsa/NTP Management is required to confirm what action(s) have been taken with regard to this matter.”
The protected disclosure also notes two separate incidents that were incorrectly handled by Necsa deployees.
According to the disclosure, on 28 December the concentration of hydrogen in one of the reactor’s cells exceeded the permissible limit. ……..http://amabhungane.co.za/article/2018-06-07-another-nuclear-safety-scare-at-pelindaba-as-management-fumbles
South Africa: draft Integrated Planning Framework Bill – another attempt to push new nuclear build
DRAFT INTEGRATED PLANNING FRAMEWORK BILL, Another attempt to push the new nuclear build programme? https://www.dailymaverick.co.za/article/2018-06-04-another-attempt-to-push-the-new-nuclear-build-programme/#.WxcDhzSFPGg, By Daily Maverick Staff Writer• 4 June 2018 The draft Integrated Planning Framework Bill could be the latest worrying development in the relentless bid to push the new nuclear build programme forward.
On Monday, 4 June 2018, comments from the public on the draft Integrated Planning Framework Bill are due to the Department of Performance Monitoring and Evaluation (DPME) in the Presidency.
The call for comments makes the draft bill sound fairly benign, in that the DPME says the bill will provide for the functions of the department and establish an institutional framework for “a new predictable planning paradigm and discipline within and across all spheres of government”.
However, upon analysis, the bill could be the latest worrying development in the relentless bid to push the new-nuclear build programme forward.
On 17 May 2018, Loyiso Tyabashe, senior manager of nuclear new build at Eskom, said at African Utility Week that Eskom is continuing with front-end planning for a nuclear build programme. This despite Cyril Ramaphosa sending clear signals at the World Economic Forum in Davos in January that South Africa does not have money to pursue a major nuclear plant build.
Within this context, consider the following lines contained in the draft integrated planning framework bill, which says that the Minister in the Presidency must:
(c) annually in consultation with the Minister of Finance develop a budget prioritisation framework in order to guide the allocation of resources to organs of state in the national sphere of government;
(d) annually give input to the Minister of Finance in the preparation of the budget on—
- the status of the economy and the possible macro-economic interventions;
- its alignment with the National Development Plan; and
- the proposed capital and development projects and programmes and related expenditure;
Nkosazana Dlamini Zuma is Minister in The Presidency responsible for Planning, Monitoring and Evaluation. This bill would give the minister the ability to develop a budget prioritisation framework that outlines which capital programmes to prioritise and to propose the related expenditure. Capital projects could include such contentious projects as the nuclear build, the Moloto Rail and the Mzimvubu dam.
In February 2018, which is after Cyril Ramaphosa signalled at the World Economic Forum that South Africa has no money for major nuclear expansion, the DPME launched a discussion paper on energy. The DPME’s website notes that enquiries related to this discussion paper could be directed to Tshediso Matona.
Tshediso Matona is the Secretary for National Planning at the DPME and is also the fired former Eskom boss to whom former President Jacob Zuma apologised about the way he was treated when he was fired.
The discussion paper reiterates that “the promulgated IRP 2010-2030 included 9.6 GW of nuclear power generation capacity, which has been confirmed as existing policy on numerous occasions. The Draft IRP 2016 that is in the public domain for consultation following a significant time-lapse since the promulgation of the IRP 2010-2030 in 2011 has a Base Case that requires nuclear power by 2037 (earliest) while a Carbon Budget scenario requires it by 2026.”
The discussion paper does acknowledge that the court case in which the Inter-Governmental Agreements (IGAs) with the United States of America, the Republic of Korea and the Russian Federation were legally challenged, determined the IGAs to be irrational, unlawful and unconstitutional. The court ruled that they should be set aside.
However, the paper then continues to say that the opportunity for small modular reactors to be included in the integrated energy planning framework should be considered. While it says that appropriate realistic costs should be considered, the paper outlines in the line immediately before that small modular reactors have typically been considered prohibitively expensive. With regards to the small modular reactors, the paper refers to revived research and previous research in preparation for the shelved Pebble Bed Modular Reactor which cost about R10-billion before it was shut down.
So, if a smaller nuclear build at an appropriate realistic cost could be possible, should taxpayers be worried? According to two recently released reports by the World Wide Fund for Nature (WWF), there is cause for concern. The WWF reports look at the players’ potential strategies for pushing the nuclear new-build programme as well as the domestic procurement and public finance implications. WWF cautions that suggestions for smaller amounts of installed nuclear capacity appear to be an attempt to gain support for smaller amounts of nuclear energy and use these as a stepping stone towards building the full 9.6 GW.
How might the Integrated Planning Framework Bill play a role in the continued push for nuclear? If the bill is legislated it would give the Minister in the Presidency responsible for Planning, Monitoring and Evaluation the ability to give input to the Minister of Finance on proposed capital and development projects and programmes and related expenditure. The financing would need to come from somewhere.
WWF notes that finance for electricity generating plants typically comes from “corporate finance, government equity, government guarantees, loans from development finance institutions, a long-term loan from an export credit agency, and extra cash generated from regulated tariffs”.
However, says the WWF, it is unlikely that corporate finance would be used; government-to-government loans or financing from state banks or development finance institutions of the vendor’s home country are more likely to be used, with sovereign wealth funds another possibility. In order to enable a loan, National Treasury may need to put up a loan guarantee. Given the alarming trend of State-owned Entities including Eskom needing bailouts, the possibility of the loan being called in would be a risk. The ratings downgrade that Eskom received would also mean that a loan, if it were granted to Eskom, would attract a higher interest rate than previously.
The draft Integrated Planning Framework bill is currently in white paper form. When it comes before Parliament, there is a strong rationale for civil society to study it closely and make submissions to ensure that it is not used as a tool to push corrupt capital projects through the system. DM
South Africa’s Minister of Energy says that S.A. has called of the deal with Russia to develop nuclear power
SA no longer has agreement with Russians on nuclear, says Radebe, Fin 24, Khulekani Magubane Cape Town – Minister of Energy Jeff Radebe told eNCA on Sunday evening that South Africa no longer had an agreement with the Russians to procure for the development of nuclear energy for the country.
Eskom ‘abandoned’ plans to build a nuclear power station in the Eastern Cape – but is paying R16.5 million to keep it alive
Phillip de Wet , Business Insider SA May 22, 2018,
South Africa’s energy corporation Eskom still dedicated to nuclear power
Eskom continues with front-end nuclear preparation Carin Smith
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