September 21, 2017

South Africa’s nuclear procurement: folly or foresight?  

Through a gazetted notice, the Government of South Africa has, in principle, given a critical green light for the controversial 9600 megawatts (MW) nuclear power procurement process to begin, despite unanswered questions about the scheme’s financial viability.

Definitely, the time between the announcement and the awarding of contracts will be very crucial, as a picture of the real cost South Africa’s fiscus will bear will emerge.

Dispelling fears that the announcement might have been rushed, quoted by News24, energy expert, Chris Yelland, says there are a number of matters yet to be addressed. “I believe there is still a long road ahead before commitments can be or are made in the form of contract awards for a nuclear new-build,” he comments, referring to a detailed cost/benefit analysis by the Department of Finance, in addition to an update to IRP2010-2030 that still needs to be done. “Request for proposals must still commence; shortlisting of vendors and final bids from shortlisted vendors must be recorded,” he adds.

Some comfort might also come from the assurance that Finance Minister, Pravin Gordan, gave in his maiden speech following his appointment for his second stint that “we will proceed with a formal procurement process, only it is viable”.

The picture of the cost South Africa will pay for its nuclear ambitions will only emerge in due course. That’s when it will be established whether the decision was an act of folly or foresight.  Analysts have put it around 4 trillion rands (almost four times of the current GDP), a burden they fear coming generations will bear.

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