South Africa's controversial plan to build 9.6 gigawatts of new nuclear power capacity is heading to court on December 13‒14. This is the latest chapter in a protracted saga stemming from legal action initiated by Southern African Faith Communities' Environment Institute (SAFCEI) and Earthlife Africa Johannesburg (ELA).1,2
In 2014, SAFCEI submitted several requests for information on the nuclear plans to the Department of Energy using the Promotion of Access to Information Act. Those requests were refused on unsatisfactory grounds. In October 2015, SAFCEI and ELA initiated legal action, challenging various aspects of the nuclear procurement process. They maintained that the government did not follow legal procedure in the procurement process and didn't meet the requirements of the constitution for a fair, equitable, transparent, competitive and cost-effective process.3
The government's response to the legal action, long delayed, revealed further inconsistencies. It was revealed that the Department of Energy gazetted a 2013 Section 34 Determination (which is required before a nuclear procurement process can go ahead) on 21 December 2015, after keeping it secret for two years. Moreover, the Department side-stepped the necessary Parliamentary approval and public participation process by tabling this determination under section 231.3 and not section 231.2 as was advised by the state law adviser.4
SAFCEI and ELA's lawyers submitted a supplementary affidavit in March 2016. The government delayed its response, missing three deadlines and compelling SAFCEI and ELA to issue a rule 30A notice, which gave the government until 31 May 2016 to respond. The government's answering affidavit was finally received, but it failed to include 10 documents that had been referenced in the affidavit. When lawyers requested these documents, the government refused.5
SAFCEI and ELA signed the last affidavit on September 15 and the dispute goes to court on December 13‒14. The organizations contend that the case is about the requirements for lawful, procedurally fair, rational, statutory and constitutional decision making.6
SAFCEI and ELA allege that legal documents in their possession indicate that South Africa signed a binding nuclear deal with Russia to supply the reactors, and that the Russian agreement was entered into unlawfully. Russian nuclear firm Rosatom issued a press release in 2014 saying that it had been chosen to supply reactors, but quickly back-tracked.7
The Mail & Guardian editorialized in February 2015 that the bilateral agreement "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. ... Acting as if there are no other possible vendors, the agreement is heavily tilted to feather Rosatom's bed and minimise its risk. The Russians are indemnified against nuclear accidents and promised a host of regulatory and tax concessions."8
Further evidence of the government's obsessive secrecy came with Energy Minister Tina Joemat-Pettersson's rejection of an appeal by the Open Democracy Advice Centre ‒ acting on behalf of the Business Day newspaper ‒ against her department's refusal to grant access to documents relating to government's nuclear procurement plans. The centre requested access to three reports ‒ on nuclear procurement models, the cost of nuclear plants, and financing models.9
On September 7, Joemat-Pettersson said in Parliament that the government would issue the formal 'request for proposals' (RFP) on September 30, kicking off the tendering process. But the RFP was not issued on September 30. The Rand Daily Mail portrayed the delay as another indication of President Jacob Zuma's diminishing influence, and suggested that the nuclear project will be scaled down, if it goes ahead at all.10
There are divisions within the government regarding the scale of the nuclear new-build project, the timing, the cost, whether Zuma's preference for a deal with Rosatom should be allowed to prevail or whether a genuine tendering process should proceed, and whether the procurement should be led by the Department of Energy or energy utility Eskom. Until now the department has been the procuring agent while Eskom, which is the designated owner-operator of nuclear energy plants, watched from the sidelines.
The two leading opposition parties, the Democratic Alliance (DA) and the Economic Freedom Fighters, have expressed strong criticism of the planned nuclear build. Gordon Mackay, the DA's energy spokesperson, said the delay in issuing the RFP was linked to efforts to hand the procurement process to Eskom:11
"This must be seen for what it is ‒ a blatant attempt by the Zuma administration to: side-line parliamentary oversight of the nuclear new build programme; block public debate on the need for additional nuclear capacity; create a veil of secrecy around the procurement process which would now be subject to internal Eskom processes and procedures; give President Jacob Zuma greater control of the nuclear procurement process."
"Designating Eskom as the procuring agent of the state will fundamentally limit the role and capacity of Parliament to oversee the nuclear deal and, in doing so, increase the potential of corruption surrounding the trillion rand deal. The DA rejects any attempt to designate Eskom, headed by CEO and Zupta buddy, Brian Molefe, as the procuring agent for nuclear. Eskom has proven with Medupi and Kusile that it is unfit to manage mega-projects. It has also proven that its governance procedures are lax and the Supreme Court of Appeal has found its Board Tender Committee to be corrupt."
There is also speculation that the state-owned South African Nuclear Energy Corporation (NECSA) could play a greater role.12 NECSA has been involved in two court actions over allegations of corporate governance breaches over the past year.13 The Auditor-General found that NECSA incurred R128 million (US$9.4m; €8.4m) in irregular expenditure in the 2015 financial year because it failed to comply with the government's procurement regulations. NECSA management and its board are currently being investigated by a taskforce appointed by the Energy Minister. The investigation relates to "serious mismanagement"‚ the Auditor-General said.14
The lowest of the estimates of the capital cost of the 9.6 GW nuclear build is around US$50 billion.15 South Africa is in no position to be stumping up that amount of capital. It's doubtful whether Rosatom would be able or willing to provide the capital under its Build-Own-Operate (BOO) model given Rosatom's other commitments at home and abroad.
The levelized cost of electricity for new nuclear is calculated to be R1,30 per kWh by EE Publishers, rising to R1,52 per kWh if fuel, operating and maintenance costs are included. That compares unfavorably with wind (R0,69 per kWh) and solar (R0,87 per kW).15 Likewise, the Council for Scientific and Industrial Research estimated the levelized cost of electricity from nuclear power to be R1/kWh compared to R0.60/kWh for wind and R0.80/kWh from solar PV.16
While the nuclear program makes little economic sense for South Africa, it could be hugely profitable for corrupt politicians and corporate spivs. South Africa has been rocked by numerous corruption scandals, such as the payment of around US$300 million in bribes associated with an Arms Procurement Deal. Andrew Feinstein, executive director of Corruption Watch UK (and a former ANC MP) said he feared the corruption associated with the nuclear deal "might dwarf the arms deal".17
The Right2Know Campaign said the nuclear program "commits us to a dangerous technology, and has all the hallmarks of the corrupt arms deal ‒ the risk of massive corruption-prone foreign tenders that have the potential of indebting us to foreign companies and rob the country of funds for service delivery and job creation."18
An investigation by the Rand Daily Mail summed up the nuclear program: "Zuma has assumed personal control of the nuclear programme, and it has been characterised by: secret meetings; undisclosed documents and classified financial reports; deceit; aggressive campaigning; damage control exercises; illegality; use of apartheid ('national key-point') legislation; sidestepping of Eskom's technical and financial oversight; destruction of oversight organs of state; disregarding of industry experts; refusal of public consultation; ignoring of the ANC's national executive committee (NEC) and ANC resolutions; and the removal of any government opponents, the most notable of whom was [former Finance Minister Nhlanhla] Nene."17
Pro-nuclear commentator Dan Yurman's December 2014 warning has come to pass: "Almost no one believes that as long as Zuma is in power that anything remotely resembling an orderly procurement process is likely to take place."19
1. SAFCEI, 13 Sept 2016, 'Court papers & press releases from SAFCEI/ELA court case', http://nuclearcostssa.org/?p=3488
2. SAFCEI, 14 Sept 2016, 'SAFCEI & ELA Jhb's Nuclear Campaign and Court Case', http://nuclearcostssa.org/?p=3491
3. SAFCEI, 15 Oct 2016, 'Press Release: Court Action', http://safcei.org/press-release-court-action/
4. SAFCEI, 30 March 2016, 'Court case exposes web of secrecy in government nuclear dealings', http://nuclearcostssa.org/?p=3192
5. SAFCEI and ELA, 18 Aug 2016, 'Nuclear court case – more missing documents requested', http://nuclearcostssa.org/?p=3450
6. SAFCEI, 16 Sept 2016, "See you in Court", http://nuclearcostssa.org/?p=3504
7. SAFCEI, 21 Sep 2016, 'Civil bodies a step closer in nuclear deal challenge', http://nuclearcostssa.org/?p=3522
8. Mail & Guardian, 13 Feb 2015, 'Editorial: 'Atomic Tina' blows SA away, http://mg.co.za/article/2015-02-12-atomic-tina-blows-sa-away
9. Linda Ensor, 22 March 2016, 'Access to nuclear documents denied once again', www.bdlive.co.za/business/energy/2016/03/22/access-to-nuclear-documents-...
10. Ray Hartley, 30 Sept 2016, 'Signs of a great rift over Zuma's nuclear programme', www.rdm.co.za/politics/2016/09/30/politics-live-signs-of-a-great-rift-ov...
11. Gordon Mackay, 30 Sept 2016, 'South Africa: Nuke RFP Delayed in Order to Give Eskom Greater Say and Avoid Parliamentary Scrutiny', http://allafrica.com/stories/201609300697.html
12. 30 Sept 2016, 'South Africa: Nuclear Plan On Ice As Eskom May Take Ownership', http://allafrica.com/stories/201609300935.html
13. The Times Editorial, 28 Jan 2016, 'Step one: Sort out the mess at the nuclear corporation', www.timeslive.co.za/thetimes/2016/01/28/Step-one-Sort-out-the-mess-at-th...
14. Linda Ensor, 27 Sept 2016, 'Nuclear corporation's spending comes under scrutiny of Auditor-General', www.timeslive.co.za/local/2016/09/27/Nuclear-corporations-spending-comes...
15. Chris Yelland, 1 Aug 2016, 'Study of the capital costs and the cost of electricity from new-nuclear in SA', www.ee.co.za/article/study-capital-costs-cost-electricity-new-nuclear-sa...
17. 17. Lily Gosam, 2 Feb 2016, 'Zuma, the Guptas and the Russians ‒ the inside story', www.rdm.co.za/politics/2016/02/02/zuma-the-guptas-and-the-russians--the-...
18. 26 Sept 2016, 'Nuclear deal 'has the hallmarks of the corrupt arms deal'', www.biznews.com/briefs/2014/09/26/nuclear-deal-hallmarks-corrupt-arms-deal/
19. Dan Yurman, 6 Dec 2014, 'China jumps into the action in South Africa', http://neutronbytes.com/2014/12/06/china-makes-haste-to-develop-its-nucl...