Nuclear decisions delayed in South Africa

Wednesday, 22 October 2008

Speculation is mounting on whether South Africa's nuclear new build program will get a chance to deliver in an atmosphere of continuing political turmoil.

 

After soliciting bids for a fleet of up to 12 new reactors from Japanese-owned Westinghouse and French-owned Areva, South Africa's utility, Eskom, stated it would announce a preferred bidder in April 2008.

 

However, the decision was postponed until September 2008, at which time came only silence on the subject. Now, insiders suggest a decision will be made only after a general election in 2009, while further comments from civil servants in the ministry of minerals and energy indicate that the country might not have funds to continue with initial plans for nuclear new build.

 

The combination of certainty of need and uncertainty of funding would raise the prospect of Eskom and South Africa having to enter into cooperative and joint venture arrangements with foreign companies and governments.

 

A date for the South African election has not yet been set, but it would be expected to be early next year. The decision rests with African National Congress (ANC) leader and President, Jacob Zuma, who would presumably seek to limit the time his opponent, Mosiuoa 'Terror' Lekota, has to establish a new opposition party from ANC ranks.

 

This political uncertainty would be seen as badly damaging to South Africa's status as the regional leader in nuclear energy. For example, despite Areva's investment in a joint training facility near South Africa's Koeberg nuclear power plant and interest in Eskom's tender, the company also enjoys a good relationship with neighbouring Namibia, centred around the Trekkopje uranium mine. Furthermore, the Namibian government is known to be positive towards further development in terms of uranium enrichment or actual generation of nuclear power.