South Africa's nuclear power program has become a soap opera over the past month. President Jacob Zuma said in his annual State of the Nation address on February 12 that the US, South Korea, Russia, France and China "will be engaged in a fair, transparent, and competitive procurement process to select a strategic partner or partners to undertake the nuclear build programme."
But the National Treasury said on February 1 that it has no idea where the money will come from, and a treasury spokesperson issued a statement saying "the government will not make a financial commitment it cannot afford." Zuma said details on financing would be released in the March budget, but in response the treasury insisted that the "nuclear build is so far not part of those decisions."1
Zuma is promoting the construction of 9.6 gigawatts of nuclear capacity in addition to the two existing Koeberg reactors (1.8 GW). He said on February 12 that the first new reactor would begin operation in 2023. The following day, Nuclear Industry Association of South Africa managing director Knox Msebenzi said the start date had been pushed back by two years: "The first plant was due in 2023, but it's been very delayed. Part of the delay has to do with politics. The latest date is 2025, but there may be other delays. Maybe we're perceived by government as not read."2
Russia's BOO boys
The September 2014 South Africa−Russia nuclear cooperation agreement has been published by the Mail & Guardian newspaper despite the South African government's refusal to release it. It appears that the agreement was leaked but was later found to be publicly available on the website of the legal department of the Russian foreign ministry.3
The agreement − which is not binding until and unless it is ratified by the National Assembly and the National Council of Provinces − goes well beyond comparable agreements concluded between South Africa and Korea in 2011 and the US in 2009. It creates an expectation that Russian nuclear technology will be used in favour of alternative vendors − and may breach a constitutional requirement for open and competitive tendering. The agreement would indemnify Russian vendors from any liability arising from nuclear accidents. It would provide Russian vendors with regulatory concessions and "special favourable treatment" in tax and other financial matters.3
Officials in the department of energy, international relations, trade and industry, as well as in the treasury and the chief state law adviser, raised concerns about clauses in the draft agreement − but those concerns were largely ignored.3,4
The Mail & Guardian editorialised: "The way the Russian nuclear deal was handled can only be to ensure a politically driven process, unhampered by technical or financial considerations. ... [I]t is a lopsided, murky and legally fraught arrangement that hands most of the aces to Russia's state-owned nuclear company and carries significant risks for South Africa."5
On February 20, the Mail & Guardian reported on a "top secret" presentation by South Africa's energy department, proposing a closed government-to-government procurement of new nuclear power stations instead of a transparent and competitive tender.4
'National security' is put forward by a state law adviser as a possible justification to sidestep the constitutional requirement for open and competitive tendering.4 Patriotism is the last refuge of the scoundrel and 'national security' is the last refuge of the nuclear industry.
There is one obvious reason why South Africa might favour Russian reactors − an expectation that Russia will provide capital funding under Rosatom's Build-Own-Operate (BOO) model. A draft of the agreement suggested that reactors would be vendor financed, but the final version defers any decision on funding.5
It is doubtful whether Russia can afford to employ the BOO model in South Africa given its heavy BOO commitments elsewhere and Russia's broader economic problems.6
On February 24 The Guardian newspaper reported on the contents of a cache of secret intelligence documents and cables. A December 2009 file says that foreign agencies had been "working frantically to influence" South Africa's nuclear power program, identifying US and French intelligence as the main players.7
The documents also discuss the 2007 break-in at the Pelindaba nuclear research centre. Previously believed to be a failed attempt to steal highly enriched uranium, the documents raise the possibility that the would-be thieves were acting on behalf of China and were seeking to steal design information about South Africa's Pebble Bed Modular Reactor R&D program.7 That claim has been met with scepticism.8 In any case South Africa abandoned its pebble bed program and it is a low priority project in China.
Meanwhile, Greenpeace Africa announced on February 27 that it had filed papers in the Pretoria High Court to compel the energy minister to update the country’s inadequate nuclear liability regulations. Greenpeace Africa executive director Michael O’Brien Onyeka said: "Shockingly, the levels of financial security for nuclear license holders have not been amended, updated or revised in more than 10 years. This means there is no lawfully applicable determination for the levels of financial security as required by the Act, and what is currently contained in the regulations is both out of date, and completely inadequate, which is in contravention of South Africa’s constitution.”9
1. 9 Feb 2015, 'Nuclear News Roundup for February 9, 2015', http://neutronbytes.com/2015/02/08/nuclear-news-roundup-for-february-9-2...
2. 13 Feb 2015, 'Nuclear reactor now delayed until 2025', www.iol.co.za/scitech/technology/news/nuclear-reactor-now-delayed-until-...
3. Lionel Faull, 13 Feb 2015, 'Exposed: Scary details of SA's secret Russian nuke deal', http://mg.co.za/article/2015-02-12-exposed-scary-details-of-secret-russi...
4. 20 Feb 2015, 'Top secret' nuclear plan ducks scrutiny, http://mg.co.za/article/2015-02-19-top-secret-nuclear-plan-ducks-scrutiny
5. 13 Feb 2015, 'Editorial: 'Atomic Tina' blows SA away', http://mg.co.za/article/2015-02-12-atomic-tina-blows-sa-away
6. Lisa Steyn, 20 Feb 2015, 'SA's nuclear deal with Russia is far from done', http://mg.co.za/article/2015-02-19-sas-nuclear-deal-with-russia-is-far-f...
7. Seumas Milne and Ewen MacAskill, 24 Feb 2015, 'Africa is new 'El Dorado of espionage’, leaked intelligence files reveal', www.theguardian.com/world/2015/feb/24/africa-el-dorado-espionage-leaked-...
8. 1 March 2015, 'Ghosts of Pelindaba nuclear site break-in return to haunt South Africa', http://neutronbytes.com/2015/03/01/ghosts-of-pelindaba-nuclear-site-brea...
9. 27 Feb 2015, 'We’re taking the Energy Minister to court: Greenpeace', http://mybroadband.co.za/news/energy/120560-were-taking-the-energy-minis...