Will government issue the first nuclear tender?

Nuclear power is coming and the process is gathering momentum.

The government considers a new nuclear build programme, of around  600MW in size, to be an excellent idea and one that must be embarked upon as soon as possible.

In the Medium-Term Budget Policy Statement in October, former minister of finance Nhlanhla Nene announced a R200m allocation for preparatory work for nuclear power.

Currently the major challenge is financing this massive project. What will it cost and where will the money come from? No tender can (theoretically) be allocated before the funding is nailed down.

Will the country even be able to afford a mega nuclear build programme?

That’s another question. Government debt is already increasing massively and an additional nuclear programme worth R600bn (unverified and vague estimate) will put significant additional strain on
the fiscus.

While nuclear as a technology should not be discarded in my view, another issue is around the proposed scale of the build programme.

It may be a wiser alternative rather to build one new reactor at the existing nuclear facility, Koeberg.

The experience gained from building one new reactor, in terms of timelines and financial matters, could then guide a further rollout of additional reactors.

Over the long term this just makes sense. South Africa hasn’t tried to build a nuclear plant in over 30 years.

The intentions seem clear enough. Then again, many promises have been made and fallen by the wayside since. For example the IRP 2010 said nuclear power had to kick in in 2023. That is in seven years’ time.It is generally accepted that a nuclear build will take around 10 years. The deadline has therefore been missed already.

Finally, in a political sense, a new nuclear build programme may prove to be a pawn that could yet be played within the first six months of 2016 – the year that will be seeing the next round of local government elections.

The Eastern Cape is a province suffering from dire poverty and the worst levels of unemployment in the country, and the ruling party is especially concerned about its ability to retain municipalities in the Eastern Cape, with the Nelson Mandela Bay Municipality looking particularly vulnerable.

A new nuclear build programme in the Eastern Cape could see up to 25 000 direct jobs being created in the province.

It therefore makes sense that the nuclear programme could be kicked off as soon as the first six months of 2016.

James-Brent Styan is the author of Blackout – The Eskom Crisis. He writes in his personal capacity. 

This article originally appeared in the 31 December 2015 edition of finweek. Buy and download the magazine here.

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