Nuclear deal ‘would have blown budget’
Former Treasury chief tells Zondo commission arms deal would have looked like a picnic
Former Treasury directorgeneral Lungisa Fuzile told the state capture inquiry on Monday that if former president Jacob Zuma’s proposed “nuclear deal” had gone through‚ the government would have breached the expenditure ceiling it set for itself. The nuclear-build programme was dealt a fatal blow in 2018 by the high court in Cape Town after Earthlife Africa and the Southern African Faith Communities’ Environment Institute successfully challenged the way in which the state determined the country’s nuclear power needs.
If former president Jacob Zuma’s “nuclear deal” had gone through‚ the government would have had to breach its own expenditure ceiling to pay for it, according to testimony by former Treasury director-general Lungisa Fuzile before the state capture commission on Monday.
The nuclear-build programme was dealt a fatal blow in 2018 by the Cape Town high court after Earthlife Africa and the Southern African Faith Communities’ Environment Institute successfully challenged the way in which the state determined SA’s nuclear power needs.
The plan would have entailed SA purchasing 9‚600MW of additional nuclear power from most likely Russian firms at a cost of about R1-trillion.
Fuzile‚ who is testifying for the second time‚ described a presentation the Treasury had done on the fiscal implications of the nuclear build project.
“We modelled two scenarios. We did the maximum amount that was contemplated, which was 9.6GW‚ then we also did a smaller scenario predicated on a modularised approach to nuclear, which was 2.4GW. We made assumptions about the costs per kilowatt. We made assumptions about GDP growth‚” Fuzile said.
The Treasury’s assumptions were based on 2% GDP growth per annum a forecast SA has been unable to accomplish.
“It would have caused our country to breach the expenditure ceiling that government had set for itself,” said Fuzile.
Quoting public enterprises minister Pravin Gordhan‚ who was finance minister when the deal was proposed‚ Fuzile said should anything go wrong it would make the arms deal “look like a Sunday school picnic”.
The inquiry’s chair, deputy chief justice Raymond Zondo, on Monday postponed an application by former finance minister Des van Rooyen to crossexamine Fuzile.
Fuzile had testified before that a suspected Gupta family ally who was parachuted into his office as Van Rooyen’s adviser had acted as a law unto himself‚ handing out instructions to senior officials even before Van Rooyen was sworn in in 2015.
He detailed how after just three minutes after receiving a confidential report‚ Van Rooyen’s advisers had forwarded it to Gupta business associates.
Lawyers acting on behalf of Van Rooyen approached Zondo for leave to cross-examine Fuzile and for Van Rooyen to give his own evidence.
However‚ Zondo indicated that after reading Van Rooyen’s statement to the commission last week‚ he had asked for a supplementary affidavit on allegations that placed the former minister at the Guptas’ Saxonwold compound numerous times before he was appointed.
Zondo said it would not be fair for Van Rooyen to proceed with the application to crossexamine Fuzile until his supplementary affidavit was filed.
WE MODELLED TWO SCENARIOS ... THE MAXIMUM AMOUNT CONTEMPLATED, WHICH WAS 9.6GW‚ THEN WE ALSO DID A SMALLER SCENARIO
IT WOULD NOT BE FAIR IF VAN ROOYEN PROCEEDED WITH THE APPLICATION TO CROSS-EXAMINE UNTIL HIS EXTRA AFFIDAVIT WAS FILED