Surprise Visit to Russia by South African President Prompts Nuclear Power Concerns

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--There is some fancy footwork from players in the build-up to the final decisions on South Africa's proposed 9,600-megawatt (MW) nuclear development program.

Three weeks ago, President Jacob Zuma popped up in Moscow, to the surprise of South Africans, shaking hands with Russian President Vladimir Putin, who himself has come under strain from boycotts imposed by Western nations as a result of Russia's foray in Ukraine.

Zuma was not accompanied by any senior members of his cabinet, so the thought arose that he might be taking the inside lane to fast-track a nuclear supply deal.

With a cost of as much as $90 billion through 2030, South Africa's proposed nuclear power development program has not met with unanimous acclaim, even among key members of the government. More flexible methods to address the country's power gap have been suggested.

Zuma has taken every opportunity to champion the nuclear plan, almost as if it were a done deal. He also has shown a liking, in the past, for large international supply deals, where fortuitous interventions can be made in the complicated and sometimes secret supply chains.

At the end of last week, Russia's state-owned nuclear company, Rosatom, said in a joint statement with South Africa that an agreement on strategic nuclear energy partnership had been signed during the International Atomic Energy Agency meeting in Vienna.

South Africa Energy Minister Tina Joemat-Pettersson said: "South Africa today, as never before, is interested in the massive development of nuclear power, which is an important driver for the national economic growth."

Rosatom and Joemat-Pettersson said the partnership lays the foundation for procurement and development of as many as eight large-scale nuclear units, using Russian Voda Voda Energo Reactors (VVER), with an installed capacity of about 9,600 MW.

The signing has been criticized by observers, as it appeared to preempt the official procurement process. On Tuesday, a South African government official said the Russian cooperation agreement was part of a tender process that would involve other competing companies and countries. A government source said Rosatom had "jumped the gun," and that other similar agreements would be signed with other nuclear vendor countries.

France, China, South Korea, the U.S., and Japan have been nurturing their bidding prospects, according to the South African official. The bidding process is not expected to be completed before mid-2015, which would be followed by the signing of final contracts.

Concerns also were voiced about backroom deals subverting the official, transparent process, and the timing of the move toward Russia as running against the policy direction of other allies.

The energy spokesman for the Democratic Alliance, the official South African opposition, said in a statement: "We have serious concerns about this agreement. Last year, an unsigned draft agreement sought to give Russia exclusive rights for the construction of nuclear plants in South Africa by committing the government to securing consent from Russia, should South Africa wish to enter into any other agreements with third-country organizations or countries."

For related information, see June 19, 2014, article - Zuma Backs South Africa's 9,000-Megawatt Nuclear Build and Energy Sector Shake-up,and March 10, 2014, article - South Africa Nears Decision on $100 Billion Nuclear Program.

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