/ 24 February 2016

Nuclear programme must face transparent tender process, be affordable

Caution over the prohibitively expensive nuclear project cost two finance ministers their jobs.
Caution over the prohibitively expensive nuclear project cost two finance ministers their jobs.

The South African government has allocated a further R200-million towards “preparatory work” for its 9 600MW nuclear energy build programme. This amount was allocated by former finance minister Nhlanhla Nene in his mini budget in 2015.

Finance Minister Pravin Gordhan’s 2016 budget review document states that these funds have been reprioritised so that a “transactional adviser” can be appointed to assist the department of energy with a “call for proposals”.

However the department of energy’s budget vote in the 2016 estimates of national expenditure refers to “advisers” and “consulting services”.

It states that the advisers will provide “transactional advice” to the department.

The budget review states that nuclear energy involves “substantial upfront costs” and that government will only expand nuclear capacity at a “scale and pace that is affordable”.

It also states this will only be done after a “thorough and transparent tender process”.

Responsibility for the call for proposals falls under the nuclear policy division of the department’s nuclear programme and the R200-million significantly increases the budget of this division, which previously ranged between R700 000 and R8-million over the last four financial years.

The department’s nuclear energy programme spent R643-million in the 2012-2013 financial year, R723-million in 2013-14, R845-million in 2014-15 and R645-million last financial year.

The programme’s budget allocation for 2016-17 is R863.6-million, dropping slightly to R765-million in 2017-18 and then rising to R808-million in 2018-19.

The programme currently has a staff component of 27, up from 23 in the 2014-15 financial year.

This is only expected to increase by one employee by the time the 2018-19 financial year rolls around.

The 2016 estimates of national expenditure state that besides the call for proposals the department of energy is expected to “increase nuclear awareness” through “active demystification campaigns”.