He might be coming to secure a better relationship with South Africa and to show off his new supermodel bride, Carla Bruni, but behind all the glitz and glamour French President Nicolas Sarkozy is hoping to help French company Areva secure the most lucrative deal South Africa has to offer.
The deal will make the controversial multibillion-rand arms deal look like small change. On his first visit to South Africa since being elected president of France, Sarkozy is set to nudge the South African government into giving the tender for building a nuclear power station to Areva.
His timing is impeccable: the closing date for tender submissions was January 31 and Eskom will decide on the winning bidder in June.
The initial evaluations of the bids from Areva and the American company, Westinghouse, were done on February 15 and a recommendation on the preferred nuclear vendor will be submitted to the Eskom board by June.
The project, known as Nuclear 1, is for the construction of a nuclear power plant, the capacity of which will range between 3 000MW and 3 500MW. The bill is expected to be about R120-billion.
Nuclear 1 is due to start generating electricity from 2016.
The grand prize, however, will be the tender that government has issued for the generation of electricity in the longer term.
Known as the fleet option, the tender asks for proposals relating to the potential construction of 20Â 000MW of nuclear capacity by 2025.
This could mean increasing the total number of nuclear power stations to six, which will bring the total cost for both contracts to more than R700-billion.
The closing date for fleet option submissions is later this year.
Eskom heard last week from Finance Minister Trevor Manuel that it will receive a capital injection of R60-billion from the government to fund expansion of electricity generation projects to deal with the energy crisis South Africa faces.
It is estimated that the power utility will spend R1,3-trillion in the next 20 years to bring the country’s energy needs up to speed.
Officials from the department of foreign affairs say that during the recent electricity shortages France stepped up to the plate to offer South Africa help and advice.
Sarkozy is joined on his South African visit by 40 hand-picked business people who will hold discussions in the recently established South African-French Business Forum.
Co-chairing the forum is Areva’s chief executive, Anne Lauvergoen. With business magnate Patrice Motsepe she will host a grand banquet in Cape Town that will be attended by both Sarkozy and President Thabo Mbeki.
South African and French sources confirmed that the Eskom tender will be discussed by the two presidents, but emphasised that this should not influence the outcome of the tender.
‘This is how Sarkozy operates. He will raise [the issue of the tender] in the context of discussion on how France can help South Africa overcome its energy challenges,†said a senior South African government official.
‘It is general practice around the world that Sarkozy will, when on overseas trips, strongly bat for French companies. He will raise the bids as a matter of course.†Since taking office, Sarkozy has come out strongly in favour of relations with African countries on an equal basis rather than the merely dishing out of aid.
This has found resonance with the South African government and the two presidents have discussed stronger partnerships since they met at the Rugby World Cup final in Paris last year.
Areva has already become involved in Asgisa and Jipsa, the economic development projects led by Deputy President Phumzile Mlambo-Ngcuka.
This might give the company a head start in the tender process as Asgisa projects contribute 20% to the scoring of Eskom tenders.
Areva already trains South African nuclear industry engineers at postgraduate levels at the Sorbonne in Paris and is also due to start training nuclear engineering postgraduate students in nuclear project management at North-West University.
An official bilateral agreement will also be signed during Sarkozy’s visit to beef up the partnership between the two countries to address the local skills shortage. Training in nuclear competencies will be an important part of this agreement.
Sarkozy will have a courtesy visit from ANC president Jacob Zuma and a private audience with Mlambo-Ngcuka during his whirlwind visit to Cape Town before departing for Johannesburg on Friday where he will meet former president Nelson Mandela.