Questions raised over Treasury nuclear build studies

More questions have arisen about funding the country’s proposed nuclear build after it emerged in the National Treasury annual report that it had completed several studies in the past 2014/15 financial year. According to the Treasury report, its state-owned enterprise oversight and governance unit had “finalised the report on financing nuclear options, models and solutions” – and a report was submitted to the Department of Energy before the end of the 2014/15 financial year, on March 31 last year. DA MP and finance spokesman, David Maynier, on Sunday said this stood in contrast to recent public statements by the government that cost-benefit and affordability studies were still under way. Now Maynier wants the parliamentary finance committee to urgently schedule a briefing by Treasury on the economic and financial implications of the proposed nuclear build, and what the treasury’s studies showed to date.

“We cannot sit back and allow the nuclear build programme to go ahead in secret, given the massive financial implications for South Africa,” he said. However, Parliament is in recess and will only return on October 13. The medium-term budget policy statement, which may give a hint on nuclear funding which February’s Budget did not, is set down a week later, on October 21. Questions about funding the nuclear build of between six to eight reactors to produce 9 600MegaWatts of electricity comes as the clock is ticking on starting the procurement process by Wednesday. That’s the end of the second quarter of the 2015/16 financial year, which energy officials and Energy Minister Tina Joemat-Pettersson repeatedly publicly promised would see the start of the procurement process. A strategic partner would be in place by the end of the financial year at March 31 next year, according to the energy minister and officials.

Up until a few months ago, neither energy officials nor the minister put rands and cents to the proposed build, saying this could give commercial advantages to potential bidders. However, the minister rejected the R1-trillion price tag, widely touted by experts, as fiction, as recently as earlier this month, when she briefed the parliamentary energy committee on September 1. “I’ve never been given figures of R1 trillion,” Joemat-Pettersson insisted, in what now may be seen as an indication that at least some expenditure figures had long been available. The economic transformation discussion documents, one of several prepared for next month’s ANC national general council, or mid-term review, states: “government must commit to a full, transparent and thorough cost-benefit analysis of nuclear power as part of the procurement process, and clarify the status of the update to the integrated resource plan”.

On Sunday, Maynier said in addition to the state-owned enterprise oversight and governance unit, the Treasury’s urban development and infrastructure unit also completed several studies on the feasibility of gas, nuclear and regional hydro (water) power for electricity generation. All these studies were completed before the end of the 2014/15 financial year. “National Treasury have clearly done more work on the feasibility, financing and assessment of alternative energy options, including nuclear energy, than the minister has been prepared to disclosed,” said Maynier. “The minister is walking a political tightrope because the National Treasury has more than likely raised serious questions about the feasibility of the nuclear build programme.”