Concern nuclear deal was reached behind closed doors

‘I fear that the corruption in this deal might dwarf the arms deal’, Andrew Feinstein said.

FEARS are growing in South Africa that agreements to build nuclear power plants that could be the most expensive procurement in the country’s history would be made behind closed doors, without the necessary public scrutiny.

Among those voicing concern, two government sources said the Treasury was not being included in procurement discussions, despite the massive budgetary implications of a project that experts said might cost as much as $100 billion (R1.3trillion) .

Breakneck speed

Construction on the first plant is due to start next year, breakneck speed compared with the years of regulatory and environmental checks for nuclear projects in countries such as Britain and the US.

The DA believed the pace of the deal would prevent proper analysis before contracts were signed and huge sums of money change hands.

“The whole deal has been veiled in secrecy. We have no details on what we’re buying, how much it’s going to cost or how we’re going to pay for it,” shadow energy minister Gordon Mackay said.

The Department of Energy (DoE) did not respond to requests for comment. It has said several times the procurement process will be transparent and follow procedure.

Finance Minister Nhlanhla Nene was forced last week to deny reports of tensions with the DoE over the plans and said the Treasury was playing a supporting role in the procurement process.

Pretoria has already signed non-binding inter-government agreements for nuclear power support from several countries including France, China and South Korea. President Jacob Zuma said last week that the nuclear plan was at an “advanced stage” and the procurement process should be com- pleted by March.

Following meetings between Zuma and Russian President Vladimir Putin last year, the Russian atomic agency Rosatom said it had agreed a $10bn contract to build power stations.

However, the DoE denied an agreement had been reached, raising public suspicion of backroom dealmaking – an accusation often levelled against the ANC under Zuma’s tenure.

“The nuclear deal is of huge concern given South Africa’s history of endemic corruption,” said Andrew Feinstein, a former ANC lawmaker and now executive director of Corruption Watch UK. He is the author of a book about alleged widespread graft in a $4.8bn arms deal during the late 1990s. ”I fear that the corruption in this deal might dwarf the arms deal,” he said.

Chronic crisis

South Africa’s economy is in the midst of a chronic electricity crisis as it scrambles to stem power shortages that are increasing costs for industry and discouraging investment.

Part of its response is to build the new nuclear plants that would add 9 600 megawatts (MW) by 2030. Its only existing plant, which began operating in 1984, produces 1 600 MW.

The country relies mostly on coal for its 42 000 MW generating capacity. A 2013 study by the University of Cape Town’s Energy Research Centre found more nuclear power was not needed and would not be costeffective.

The DoE has estimated the build would cost $4 200 per kilowatt. Energy experts said this was optimistic and the calculations were based on out-of-date assumptions.

Given the lack of funding details, economists worry it could pile more debt on an economy that grew only 1.5 percent last year. Credit agencies cut South Africa’s rating last year, citing weak growth and rising public debt.