2013 Nuclear stamp mystery solved

The mystery surrounding the recently published government Gazette on nuclear energy, which contains a 2013 stamp signed by former Energy minister Ben Martins, has been solved.

Thabane Zulu, director general of the Department of Energy (DoE), said in an exclusive statement on Saturday that Energy Minister Tina Joemat-Petterson had decided to release the old Gazette because the determination on nuclear energy signed in 2013 had remained unchanged.

He apologised on behalf of the department for not making it clear when the Gazette was published on 21 December 2015.

“The department accepts that this should have been made clear when the determination was gazetted on 21 December 2015,” he said.

This comes after Fin24 broke the story this week that the gazette had been published, while no official statement or comment by cabinet or the DoE had been released regarding its publication – until now.

Explaining the reasoning behind this, Zulu said the current nuclear energy procurement process is guided by the Integrated Resource Plan for Electricity 2010-2030, which was first gazetted in May 2011.

“This plan included proposals around the appropriate mix for electricity generation including, primarily, coal, nuclear and renewable sources of energy,” he said.

“In order to proceed with the request for proposals as agreed by Cabinet on 9 December 2015 it was necessary to ensure that the National Electricity Regulator of South Africa (Nersa) has been consulted on the appropriate energy mix and particularly the intention to procure additional nuclear capacity.

“This was done in 2013 and agreed by Nersa and the minister at the time, minister Ben Martins, MP, and a determination to this effect in terms of the Electricity Regulation Act of 2006 was signed.

“However, the actual gazetting of this determination was withheld until such stage that government had agreed to proceed with the request for proposals.

“Once this agreement was reached on 9 December 2015, I consented that the determination signed in 2013 could be released, particularly as nothing had changed in the Integrated Resource Plan for Energy in the intervening period,” said Zulu. The Democratic Alliance on Thursday questioned why Martins signed off the gazetted decision and why the Cabinet decision was dated 11 November 2013.

“For two years government and subsequent Energy Minister Joemat-Pettersson have consistently peddled the line that Cabinet had not approved the nuclear procurement process which will cost South Africa unaffordable billions of rands,” DA MP Gordon Mackay said in a statement.

“It is clear that the decision to spend up to R1trn on nuclear builds was taken in 2013, and therefore engagements with foreign nuclear suppliers have been more serious than Tina Joemat-Pettersson would disclose.”

A Twitter account apparently belonging to Martins posted a series of eight tweets on the notice.

One said: “My term of duty as the minister of energy was from 10th July 2013 – 25th May 2014,” while another said: “I note government gazette, no. 39541 of 21 December 2015, it was not discussed with me.”

This after, on Saturday the Department of Energy (DoE) officially confirmed that Cabinet has authorised the department to issue a request for proposal (RFP) for South Africa’s nuclear procurement programme.

This is the first official government statement regarding the decision that was made during the infamous Cabinet meeting on December 9, which occurred just before Nhlanhla Nene was fired as Finance minister.

The closest media got to a confirmation was during a question and answer session with Nene’s successor (and predecessor) Pravin Gordhan, who said government would proceed with a formal procurement process only if it was affordable.

A major query regarding this development was how government would pay for the construction of the 9 600 MW nuclear power stations. The DoE said that Cabinet approved a process during this meeting where the business proposals submitted through the RFP process will determine the final funding model.

Fin24 broke a story on Thursday that revealed a Gazette that paved the way for the department to issue RFPs. Up until that point no official press statement had confirmed reports that Cabinet had taken the next step in procuring nuclear energy.

DoE director general Thabane Zulu confirmed in an exclusive statement on Saturday that these next steps were approved at a Cabinet meeting on 9 December.

He said the funding model will be “submitted to Cabinet thereafter for final approval and implementation”.

Zulu said these decision were made after Cabinet received a report back from the Energy Security Cabinet Sub-Committee, which had considered the work being done by both the DoE and Treasury in respect of the funding and financing of the programme.

“The decision to proceed with issuing the request for proposal will further assist in developing a funding model,” he said.

“Proposals in this regard will first be submitted to Energy Security Cabinet Sub-Committee for recommendation before being considered by Cabinet.

“Any decision to proceed further with a Nuclear New Build Programme will therefore only take place after the RFP process has been completed and a final funding model has been developed, and then referred back to Cabinet for consideration and approval.

“The Department of Energy is committed to cost effectiveness and full transparency,” he said. “We will ensure that the integrity of the process is safeguarded at all times and is done within the existing fiscal policy framework of our government.”

Zulu said the decision to proceed with developing the Nuclear New Build Programme was taken in principle by Cabinet in June 2015.

“However he said this was subject to more work being done on the proposed funding model; the risks and mitigation strategies; and the contributions by countries as contained in the inter-governmental agreements.”

Matthew le Cordeur, Fin24