Nuclear procurement irrational - DA

Cape Town – The Democratic Alliance has questioned the 'sidelining' of Parliament in the approval of the nuclear procurement programme.

Finance Minister Pravin Gordhan told reporters on Monday that the government would act in a fiscally responsible way and there would be a formal procurement process according to law.

"We can't make commitments when we don’t know where we are going to get the money."

Business Day reported on Monday that Cabinet gave the green light for the procurement programme last week.

If the process goes ahead, a request for proposals would be issued.

This means nuclear vendors would then submit proposals, which would include financing and pricing models.

DA MP Gordon Mackay said the decision was concerning.

"The decision by Cabinet to proceed without critical information regarding the potential procurement is blatantly irrational in light of South Africa’s very real and worsening economic challenges following the President's bungle in the dismissal of the Minister of Finance and the subsequent muddle," he said.

He said they were concerned that Parliament was sidelined by Cabinet in what would constitute South Africa's biggest ever public procurement amounting to at least R1 trillion.

However, it is not necessary for Parliament to be part of the decision to start the nuclear procurement programme.

Parliament's Appropriations Committee would get involved once the procurement process gets underway, he said.

Nevertheless, believes it should have been taken past Parliament, given the size of the project.

"Broader questions as to the legality of Cabinet’s decision to proceed with procurement also exist with regard to the Public Finance Management Act (PFMA) which requires National Treasury sign-off of any major public procurement.

"Other than allocating R200m for preparatory work for potential nuclear procurement during the Medium Term Policy Statement (MTBPS) in November – no such sign-off has been provided by National Treasury."

Nomura emerging market analyst Peter Attard Montalto told Fin24 on Monday that if Cabinet had approved the programme, it was very serious.

"I believe this move is illegal under the Public Sector Finance Management Act. Major public procurement projects have to have National Treasury cost-benefit analysis and affordability sign off."

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