Nuclear move made as Gordhan exits
JUST two days before President Jacob Zuma removed Pravin Gordhan as finance minister, Eskom tabled a presentation to the National Treasury indicating it was ready to procure nuclear power as early as June.
The detailed presentation by Eskom officials on March 28 reveals that the power utility wants to invite bids in June and appoint the successful bidder next March.
This is likely to fuel speculation that Gordhan was removed as a stumbling block to Eskom’s plan to build nuclear power stations estimated to cost R1-trillion.
Ratings agencies Fitch and S&P Global Ratings have cited the nuclear project as one of the reasons for South Africa’s downgrade.
Eskom announced its intent to continue with nuclear plans in December when it issued a request for information after taking over the project from the Department of Energy. The request for proposal is open for comment until April 28.
The document seen by the Sunday Times shows Eskom has concluded its studies at Thyspunt, southeast of Port Elizabeth, and that designs for the plant are “nearing completion”. The document also details progress at four sites in the Western Cape earmarked for nuclear reactors.
Eskom said it was conducting studies in connection with Duynefontyn in the Western Cape and awaiting a response about a licence in 2018.
“Environmental approval for first [Thyspunt] 4 000MW waited December 2017. [Energy regulator] Nersa generation and water-use licence application pending,” reads the document. But it suggests the nuclear programme be done “at a rate and pace that the country can afford”.
Eskom spokesman Khulu Phasiwe said the power utility was looking at various funding models.
“The RFI [request for information] responses from respondents are due at the end of April 2017. Eskom hopes that the responses to the RFI will assist it to refine its request for proposals [RFP].
“As part of the proposed RFP process, Eskom intends to, amongst others, obtain information from respondents on the various funding models for the proposed nuclear reactors.
“This will assist Eskom in ascertaining the commercial viability of proceeding with the nuclear newbuild programme which is affordable for Eskom and the country,” said Phasiwe.
There are fears that new Finance Minister Malusi Gigaba will approve the deal, which Fitch has described as “expensive”. Gigaba indicated last weekend that nuclear would be implemented, but cost-effectively.
The nuclear programme has been delayed since June 2015 and was said to have been the cause of former finance minister Nhlanhla Nene’s removal in December 2015. The procurement programme was approved by the cabinet on December 9 2015, clearing the way for vendors to present proposals.
The Treasury’s prudent approach to spending divided Zuma’s cabinet and saw attacks on Gordhan. Divisions in the cabinet intensified when the Treasury declined to make available funds to construct nuclear power stations and instead allocated R200-million to a feasibility study.