SA’s biggest deal ever – drawing political lines

2012-03-03 16:15

A tussle for control of the biggest tender the South African government has ever issued has broken out between the departments of energy and public enterprise.

The multibillion-rand nuclear tender is due to be issued later this year.

The government is finalising the tender specifics for South Africa’s new nuclear programme, estimated to be valued at between R400 billion and R1 trillion.

This will surpass the arms deal as South Africa’s most expensive tender – and also its most coveted.

South Africa wants to build 9 600 megawatts of new nuclear capacity. At face value, the department of energy is in the driving seat.

In November last year, Cabinet took the decision to delegate all technical responsibility for the roll-out of the nuclear programme to the National Nuclear Energy Executive Coordination Committee, chaired by Deputy President Kgalema Mothlanthe. Energy Minister Dipuo Peters is deputy chair, while the technical team supporting the committee is chaired by the director-general of energy.

Minister of Public Enterprises Malusi Gigaba is also on the committee, together with a host of other ministers. Energy department spokesperson Thandiwe Maimane said there was no tussle and that her department would lead the nuclear charge.

But three sources in both departments told City Press there were worries about the energy department’s capacity to handle such a huge project because key officials were being investigated by the Special Investigations Unit on charges unrelated to the nuclear deal.

In the past year Gigaba has spoken out several times on nuclear power and insiders in his department believe that he is the key man to take political control of the big project.

Sources with intimate knowledge of the process say the key to the nuclear deal lies with which department will accept it as part of its balance sheet. Eskom made it clear in 2008 they had no money to fund an expansion of nuclear capabilities, and the deal was put on ice.

The cancellation of the deal irked French and American bidders no end because they had hoped to see it signed.

Whichever ministry takes charge of the programme now will be closely scrutinised and placed under massive political pressure to ensure the money is spent responsibly and the rewards spread equitably.
Now the Chinese and Korean governments have entered the fray and are also trying to convince South Africa their technology is the most cost-effective.

An official in the department of public enterprises admitted the nuclear tender was “extremely sensitive”.

“This thing of the DA asking for transparency, we cannot say how much we will spend because that will give the nuclear bidders an indication of how much we can spend. And that is what they will bid for, rather than what the stuff actually costs. That is why we are being vague about it.”

An insider close to French company Areva confirmed to City Press that a possible joint bid by the Chinese and French was being finalised.

“But before we put such a partnership out in the open the final word needs to come from the South African government,” the source said.

Peters said the government would not stipulate where the nuclear technology would come from.

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