Putin's lobolo may seal nuke deal
The energy department has submitted all five intergovernmental nuclear co-operation agreements to Parliament and, as expected, Russia has negotiated itself to the front of the queue of suitors courting South Africa for the estimated trillion-rand contract.
France, China, the United States and South Korea have also come on bended knee, but the agreements they have signed are bland compared with the lusty commitments exchanged between Pretoria and Moscow. The agreements create the framework – a prenup, if you like – for when the winning bidder emerges victorious from the imminent tender process and eventually meets South Africa at the altar.
The energy department is in a hurry, indicating that it hopes to commence the tender next month and seal the deal early next year.
As amaBhungane has been reporting since mid-2013, a bromance kindled between President Jacob Zuma and his Russian counterpart, Vladimir Putin, has drawn them into a beefy bear hug, leaving Russia’s rivals looking on in impotent envy.
The signs were there from early on, fuelling a growing suspicion that Zuma and Putin hoped to bypass a competitive tender process by smuggling a detailed agreement in through the back door.
To begin with, Russian state media have, on several occasions, reported on the agreement as being a concrete commitment that Russia would build up to eight nuclear reactors.
Another indication was that the Russian agreement was concluded in September last year, several months ahead of the next most serious contenders, France and China.
When amaBhungane obtained an exclusive copy of the Russian agreement in February, when the energy department refused to disclose what had been signed with any country, it revealed a detailed set of commitments tilted in Russia’s favour.
Only one question remained: how would the agreements with other countries compare with the Russians’ one? Now we know.
The agreement with Russia contains more specific details and clauses favourable to the bidder than any of the other bids. Of the five agreements, it is the only one that:
• Specifies that Russian reactor technology will be built on selected nuclear sites in South Africa.
The section reads: “The Parties collaborate in … the implementation of priority joint projects of construction of two new NPP [nuclear power plant] units with VVER [water-water energy reactors] reactors with the total capacity of up to 2.4GW [gigawatts] at the site selected by the South African party [either Koeberg NPP, Thyspunt or Bantamsklip] in ... South Africa and other NPP units of total capacity up to 7.2GW at other identified sites in the Republic of South Africa”. In addition, it also provides for the “construction of a multipurpose research reactor at the research centre located at Pelindaba”. As amaBhungane has previously reported, the state law adviser objected to this clause, as it “may create legitimate expectations on the part of Russia that it will automatically be contracted to develop some or all of the proposed nuclear power stations”. The objection was apparently overruled;
• Contains what amounts to a veto clause excluding any other bidder from working with South Africa without Russian consent. It reads: “The Competent Authorities of the Parties can, by mutual consent, involve third countries’ organisations for the implementation of particular co-operation areas under this Agreement.” The only other intergovernmental agreement to mention third parties is China, which makes open provision for South Africa, China and “any other third country” to work together; and
• Promises South Africa will create a “special favourable regime” in tax and other financial matters for the other party. The agreement with Russia offers South Africa no such favours in return; it will import billions of rands worth of equipment.
To become binding, these international agreements must now be referred to the energy portfolio committee in the National Assembly and the economic and business development select committee in the National Council of Provinces.
The Constitution says these committees must approve the agreements “by resolution”, and the ANC majority in both makes approval a foregone conclusion. But expect fireworks as opposition MPs ask tough questions about why South Africa appears to have already been half-bedded by the Russians.
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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.