/ 9 July 2024

Ramokgopa says nuclear procurement will go ahead

Kgosientsho Ramokgopa2
Electricity Minister Kgosientsho Ramokgopa.

Electricity and Energy Minister Kgosientsho Ramokgopa has said he would be happy to defend his department’s determination to procure 2  500 megawatts of nuclear power in a pending court challenge by the Democratic Alliance (DA).

He added a political warning though that the DA should remember that it was now part of the government of national unity and that nuclear expansion was part of the government’s programme as per the 2019 Integrated Resource Plan (IRP).

“That the Democratic Alliance has gone out to challenge the procurement of nuclear [energy], well they can go. It is a matter before the courts. We will go and explain ourselves,” Ramokgopa said on Monday during his first briefing since President Cyril Ramaphosa announced his new cabinet a week ago.

“Let me address an inherent material point that is raised in that question,” the minister added.

“The government of national unity is not a federation of parties. It is a singular executive led by President Ramaphosa.

“And when there are policy decisions that the sixth administration has passed, those are going to be protected going into the future. I think it is important.”

The previous minister of energy, Gwede Mantashe, signed a determination which Ramokgopa, published in the Government Gazette to proceed with the procurement of 2  500 megawatts of nuclear power.

Ramokgopa, to whom Ramaphosa has transferred the energy portfolio, confirmed that he intended pushing ahead with the process, adding that the procurement drive was in line with the IRP.

“We are proceeding with it. And the executive will defend, through the minister of energy and electricity, our position.”

He was addressing the DA’s immediate objection at the weekend when it was reported that the government hoped to secure approval from the treasury by next month. Ramokgopa said this process was at an advanced stage, although the timelines his predecessor communicated had been exceeded.

Mantashe began laying down the legal foundation for nuclear expansion four years ago when he approached the National Energy Regulator of South Africa (Nersa) for approval for a determination in terms of section 34 of the Electricity Regulation Act.

The DA is asking the high court to review the section 34 determination.

In its founding affidavit, it argued that the new nuclear plant would be “the largest public procurement in South Africa’s history”, with a conservative cost estimate of at least R400  billion.
It said its lawsuit was not an attempt to challenge the wisdom of nuclear procurement, but the procedural fairness of the ministerial determination.

The first flaw, the DA said, was that Nersa decided to concur with the ministerial determination without allowing for public input.

“Nersa did so two years after the minister of energy initially sought Nersa’s concurrence, and after substantial changes in the South African energy landscape.”

The DA’s second ground for challenge is that the wrong minister made the determination. It should have been Ramokgopa, not Mantashe, because by January certain powers had been transferred to him by way of presidential proclamation.

“It was the minister of electricity that was empowered to make the section 34 determination, not the minister of energy,” the DA argued.

“Yet the minister of electricity decided to ‘issue’ the minister of energy’s determination (by gazetting the determination) as a fait accompli, without deciding for himself whether to make the determination.

“This meant that the issuing of the section 34 determination was vitiated by a material error of law and fact, as well as being ultra vires.”

Ramokgopa did not raise this point.

But he did say the government was mindful of the cost implications of the endeavour and the impossibility of the build happening off Eskom’s balance sheet.

“That framework acknowledges the fact that the Eskom balance sheet is weak, the fact that Eskom will not have the ticket to finance that, so you need to find a bespoke financing instrument to do that.

“Of course, you must say who will be the operator. I can tell you now without even necessarily pre-empting what will come — it will be Eskom. So you need to manage that and that framework answers those questions — whether affordability and that, answers those questions.

“So I will not move ahead, let’s allow them to do that. That should have been done by March, April. We are past March and April.”

He stressed that he intended to respect announced timeframes.

“Now that they are with us, when we put a date out, we are going to keep to that date. The credibility of this process, whatever we do is important. The promise we make to the country on the timelines, it is important.”

DA energy spokesperson Kevin Mileham told the Mail & Guardian: “Well, they have a lot of explaining to do.”

Ramokgopa is cited as the first respondent in the DA’s court papers.

His answering affidavit is due in two weeks, and the matter is set down for hearing in mid-October.

Mileham said: “The documentation received from the various parties thus far indicates that little new information was provided to Nersa to enable it to make a considered decision in August 2023, with regard to the suspensive conditions it issued in August 2021 for concurrence with the determination to procure the 2 500MW of new nuclear power made by Gwede Mantashe.”

These conditions included a detailed cost and demand analysis, Mileham said.

“Instead, Nersa appears to have relied on the original information provided in 2021.

“Furthermore, Nersa directed [in August 2021] that the determination include the requirement that procurement occur under an engineering, procurement and construction model,” rather than fragmented contracts.

This was ignored in the final determination, Mileham said.