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SA may request nuclear bids in June – Necsa CEO

Apr 11 2017 15:05
Bloomberg: Stephen Stapczynski and Paul Burkhardt

Tokyo - The head of South Africa’s nuclear company said a request for proposals to build reactors is expected to go out as early as June as five potential suppliers emerge as leading candidates.

Companies from South Korea, France, China, Russia and Japan “are ahead of everyone else” in terms of technology and what they can offer, South African Nuclear Energy Corporation chief executive officer Phumzile Tshelane said in an interview in Tokyo.

State-owned utility Eskom is responsible for the process to hire developers for the nuclear power plants, and South Africa is looking for reactors that are proven, but not dated, Tshelane said.

“We are not going to build a first of a kind,” he said. “Nor are we going to build a last of a kind.”

South Africa’s nuclear investment plans have become a lightning rod issue for critics of President Jacob Zuma’s policies, with opposition parties and civil groups questioning the use of funds even before S&P Global Ratings and Fitch Ratings downgraded the nation’s international credit rating to junk.

The affordability of the new plants was a key point of dispute between Zuma and former finance minister Pravin Gordhan.

A request for information from vendors closes at the end of April, and will be followed by a month-long evaluation before the request for proposals is issued in about June or July, Tshelane said.

Necsa anticipates at least five bids, which will need at least six months to be evaluated and negotiated, with an award expected in the first quarter of 2018, he said. While one company would be preferred, “the reality is that a one-partner relationship is not possible,” Tshelane said.

Necsa is responsible for buying the fuel for the new plants and the project will be coordinated by the Department of Energy, according to Eskom spokesperson Khulu Phasiwe.

The recent bankruptcy filing by Westinghouse Electric, a unit of Japan’s Toshiba Corp., doesn’t disqualify its AP1000 reactor design, Tshelane said.

While cost overruns at the units under construction in the US are worrisome, they were triggered by the binding financial agreements on the project’s expected cost, not flaws in the reactor design, and technical problems that crept up at AP1000s under construction have been resolved, he said.

“As soon as it is solved, you no longer see that as a problem. That is why you want to have a reference plant. We look at it holistically, we don’t just look at the overruns.”

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necsa  |  nuclear deal  |  sa economy

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