Nuclear body faces financial meltdown

Pelindaba brass scramble to pay scientists

SOUTH Africa’s beleaguered state-owned nuclear company, Necsa, has for the first time admitted to financial strain, but vows to keep paying staff salaries on time despite “the actual cash inflow not being realised as per plan”.

According to leaked internal documentation, Necsa will not be able to pay its almost 2 000 staff this month unless Finance Minister Nhlanhla Nene’s cashstrapped National Treasury can find an extra R212-million by March 31.

Necsa, based at Pelindaba near Brits in North West, employs more than 100 scientists and about 40 engineers who form the core of South Africa’s nuclear skills base.

When, in 1993, South Africa voluntarily dismantled its nuclear weapons programme, it retained some highly enriched uranium at Pelindaba, and the skills base for enriching the uranium, of which South Africa has huge reserves, to manufacture nuclear fuel.

Should that skills base, which is globally in demand, be lost, South Africa would lose its ability to contribute scarce skills to the much-vaunted Russian-partnered nuclear programme.

According to the leaked documents, Necsa has failed to pay suppliers since November, despite President Jacob Zuma’s policy directive that the state pay all its suppliers within 30 days of services rendered.

The documents also claim Necsa is unable to pay its authorisation fees to the National Nuclear Regulator, placing the accreditation of its nuclear scientists at risk, and raising the spectre of a skills exodus on the eve of the planned nuclear build programme.

The current expectation is that Russia will build new nu- clear reactors, and that Necsa staff’s skills could contribute to manufacturing the fuel.

If not, fuel will have to be continually imported at great cost from other major producers such as Russia, raising the consumer price of electricity even further.

Necsa on Friday admitted to cash flow problems but was adamant its banking facilities were broad enough to pay salaries and meet its regulatory requirements.

It refused to divulge any details on credit obtained or needed, and dodged a question on whether it had paid its creditors on time, claiming this was “sub- ject to negotiations”.

Necsa and the nuclear regulator have issued furious denials in the past few days, since reports surfaced on alleged nepotism in its ranks.

DA MP and energy spokesman Gordon Mackay lamented Necsa’s and the regulator’s anger, calling for transparency instead.

“While corruption can be dealt with swiftly by removing those concerned, the long-term cost of maladministration is worse as highly skilled scarce staff quit Necsa for greener international pastures,” he said.

Necsa spokeswoman Shaun Chetty admitted it was “exposed to commercial realities as it does not get funded from guaranteed Treasury grants only but also from revenue-generating activities. In this instance, some revenue-generating projects were slightly delayed and thus the actual cash inflow will not be realised as per plan. Two and a half months are affected by this.”

Asked if Necsa would be requesting additional or bridging finance, she said: “This is a confidential matter between the financial institution and its client. We confirm that Necsa has an approved broad banking facility. Operationally, Necsa will utilise it as it deems fit.”

Although Chetty was adamant Necsa would manage to pay staff salaries despite its cash crunch, she was less forthcoming about its reported request to the nuclear regulator to postpone the payment of authorisation fees.

“This is a client-supplier relationship and is thus confidential in nature.”

Regarding not paying its creditors since November, Chetty was curt. “Different payment terms apply to different customer-supplier relationships. These matters are contractual subject to negotiations.”

The DA will raise urgent questions in parliament to clarify how Necsa came to find itself in such a position and what can be done to save the situation.

“Necsa’s role in conserving and developing South Africa’s civilian nuclear expertise is key to solving our energy crisis. Such expertise will be vital in navigating the treacherous waters of any potential nuclear deal,” said Mackay.

“A substantial loss of nuclear expertise from Necsa will undermine South Africa’s capacity to effectively negotiate, manage and implement any future nuclear build programme.”

Such expertise will be vital in . . . any potential nuclear deal