Nuclear deal with Russia to stay secret
Other vendor states also approached
THE nuclear co-operation agreement between SA and the Russian Federation signed on Monday will not be made public, says a top government official involved in the negotiations.
The government has made it clear it intends to forge ahead with the procurement of 9,600MW of nuclear power, despite public concern over the costs and persistent rumours that a secret deal has been made with the Russians.
On Monday, the Department of Energy and Russian stateowned nuclear company Rosatom issued a startling joint statement which implied that an agreement had already been reached that SA would procure nuclear power plants from Russia. The statement quoted Energy Minister Tina Joemat-Pettersson as saying that cooperation with Russia “will allow us to implement our ambitious
I’m sure there will be another country-to-country deal at some stage
plans for the creation by 2030 of 9,600MW of new nuclear capacities based on modern and safe technologies”.
But the triumphalist statement was later clarified by the Department of Energy and the Nuclear Energy Association of SA (Necsa): there was no procurement deal but “a country-to-country framework agreement” which is a necessary precursor to a commercial relationship over nuclear power. Similar framework agreements are to be signed with other nuclear vendor countries.
An agreement with the French government has been concluded and will be signed next month. The government “is also in discussions towards concluding an intergovernmental agreement with the Chinese government, also aimed at finding ways of supporting SA’s nuclear new build programme,” a later Department of Energy statement said.
An agreement with South Korea was signed in 2011.
But the agreements will not be made public. Asked during an interview on Tuesday to provide a copy of the agreement, group executive for corporate services at Necsa Xolile Mabhongo, who was a leading member of the SA delegation, said it “will be presented to the normal government structures such as the Cabinet’s energy security committee”.
The Cabinet subcommittee is the body charged with authority over SA’s nuclear programme. It was constituted by President Jacob Zuma in June and is chaired by him. Like all Cabinet subcommittees, its work and proceedings are not made public. However, officials have confirmed in recent weeks that the committee’s technical groundwork for nuclear procurement “is very advanced”.
The framework agreements with the various other nuclear vendor countries would also not need to be ratified by Parliament, Mr Mabhongo said.
“These agreements are essentially framework agreements entered into by the minister of energy and her counterparts.
“Once the procurement process starts in earnest I’m sure there will be another (country-tocountry) agreement at some stage,” said Mr Mabhongo.
But opposition political parties and constitutional rights lobbyists disagree that there is no necessity to make the framework agreements public, or that they be ratifies by Parliament.
Executive director of the Council for the Advancement of the South African Constitution Lawson Naidoo said: “International treaties and agreements have to be processed and ratified by Parliament.”
The council, and Democratic Alliance MP Lance Greyling, had written to Ms Joemat-Pettersson on Tuesday requesting sight of the agreement.
Mr Naidoo said it was impossible to evaluate Mr Mabhongo’s claim that the agreement with Russia was merely “a framework agreement” without binding power without seeing the agreement first. “If we can’t see it then we don’t know what sort of animal it is. This is why (the council) has written to ask for it.”
The fear that a secret deal has already been done with Russia is being fuelled by several incidents. Frequent meetings have taken place between Mr Zuma and
Russian President Vladimir Putin, of which the most recent in August has not been fully explained.
Since August 2010, Mr Zuma and Mr Putin have held six individual meetings. Additional official tours to Russia by the previous minister of energy Ben Martins and the African National Congress (ANC) and its Progressive Business Forum — essentially a fundraising body — have strengthened diplomatic and political ties. During this visit in October last year the ANC signed a memorandum of understanding with the governing United Russia party.
In August this year Mr Zuma flew to Russia on “a trade visit” interspersed with “rest periods”. However, no trade officials or ministers accompanied him.
Last November, Rosatom hosted a nuclear forum in Johannesburg after which state radio service the Voice of Russia announced that SA and Russia had reached an agreement for the procurement of eight Russian nuclear reactors.
Shortly before this announcement, in October last year, a version of a draft agreement between SA and Rosatom was obtained by Business Day. While similar in many respects to other international co-operation agreements — and an earlier one signed with France — the draft included a veto clause, in which SA’s government undertook to seek agreement from Russia on the inclusion of any third country in a commercial nuclear arrangement.
Asked whether this clause remained in the deal signed on Monday, Mr Mabhongo said it did not.
“One country could be chosen (as vendor) or a combination. SA has to negotiate the best deal for itself. (A veto agreement) is not what has happened,” he said.
The increasing closeness between Russia and SA has been accompanied by rumours in political circles since March last year that the ANC has entered into a political agreement on the procurement with Russia. ANC secretary-general Gwede Mantashe said this week that “the ANC did not procure” on behalf of the government.
Mr Mabhongo said it was expected that the procurement process would start in earnest “in the first half of next year”.
Despite the confidence of both South African and Russian officials that the procurement of nuclear power is a dead certainty, several hurdles remain in the way of procurement.
The first is the finalisation of the government’s Integrated Resource Plan (IRP), a 20-year energy plan which models electricity demand, predicts costs of generation and recommends the appropriate energy mix. While an updated IRP was produced for comment in December last year, a final document has not been submitted to the Cabinet.
A big outstanding policy question
One country could be chosen or a combination. SA has to negotiate the best deal
in the IRP is the role of nuclear power. While the 2010 version of the plan said that SA should plan for 9,600MW of nuclear power by 2030, the updated version recommended holding off on nuclear power generation for several more years and not pursuing it at all if cost went above a threshold of $6,500/kW.
The Department of Energy said last week, in reply to questions, that the IRP was being updated and would be submitted to the Cabinet.
A second hurdle is the prescriptions of the procurement process. Both the constitution and the Public Finance Management Act specify that all public procurement be done in accordance with “a system that is fair, equitable, transparent, competitive and cost-effective”.
Nuclear vendors other than Rosatom, and political parties and civil society groups, are expected to keep a watchful eye on the procurement process. Vendor companies interviewed this week said they were unconcerned about the co-operation agreement reached with Russia, as they expected similar ones to be concluded soon with their own governments.
Prof Anton Eberhard of the University of Cape Town’s Graduate School of Business said that public procurement processes would have to measure up to constitutional benchmarks.
“While the minister of energy can certainly procure nuclear power under the power she has according to the Electricity Regulation Act, it would obviously need to be consistent with the Public Finance Management Act,” he said.