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EXCLUSIVE: New chapter for nuclear firm as Russia pays Necsa R1.7m

Oct 11 2016 09:50
Matthew le Cordeur

Cape Town – South Africa’s state-owned nuclear company Necsa has received R1.7m as part of a fabrication contract to manufacture nuclear reactor components for Russia, it said on Tuesday.

The South African Nuclear Energy Corporation (Necsa) said in a statement that the first items fabricated at Pelindaba were delivered to Russian company Tenex, a subsidiary of Rosatom. The first payment represents about a quarter to a third of the total contract, it said.

The announcement comes as the lid of controversy seems to be lifting on Necsa.

This follows Energy Minister Tina Joemat-Pettersson's implementation of a task team to investigate its board and executive (with no clear outcome), while Necsa had delayed the tabling of its annual financial reports over the auditor general's concerns over decommissioning and decontamination costs. CEO Phumzile Tshelane was also put on suspended suspension last year.

However, the announcement of a new board this year and the tabling at the end of September of its report has opened a new chapter at Necsa. The resolution saw government taking partial responsibility for exorbitant costs, which Necsa believes is a technical amount as it is due over a 30- to 50-year period.

Necsa chair praises CEO

Necsa chairperson Dr Kelvin Kemm told Fin24 that the board is extremely pleased with Tshelane’s work.

“He is still on a month-to-month contract, but he is not suspended,” Kemm told Fin24. “I am looking into this and drawing up a new contract proposal. It must go to the board, but at this stage the board is very happy with his performance.”

Regarding the news of the fabrication payment, Kemm said in a statement on Tuesday: “I am pleased and proud of the fact that Necsa continues to fabricate and export nuclear assemblies internationally.

“We are pleased to be able to build on the nuclear technology exchange agreements, which have been signed with Russian nuclear companies.”

Fabrication contract a boost for Necsa

Tshelane said that “Necsa is the only company in South Africa currently internationally licensed to manufacture components to nuclear grade standards for nuclear reactor applications”.

“I know that there are many South African companies, large and small, which have facilities and systems operating at or near nuclear grade standard,” he said.

“Necsa is keen to work with them to expand South Africa’s nuclear fabrication capabilities to optimise our benefit from the major new nuclear build opportunities which are around the corner.”

Under the US ASME system of international quality standards, Necsa is certified to design and manufacture components and assemblies for international nuclear applications.

“It was a long hard road to get the N-Stamp or ASME certification for both design and manufacture, but it has been worth it,” said Tshelane.

Tshelane's vision for Necsa

The fabrication deal fits into Necsa’s vision of being financially sustainable.

In an exclusive interview with Fin24, Tshelane said his main aim at Necsa was to find products to commercialise and license to ensure the company is sustainable and doesn’t rely on government for funding.

“What keeps me really awake is that we need to find a way of sustainably financing the operations of Necsa,” he said. “That is a continuous process that we are working through. That worries me, because Necsa can’t continue being just funded by the state. We are busy finding a way of funding the operations of Necsa quite well.
“What excites me is that we need to find products to commercialise and license to allow Necsa to have a continuous flow of income,” he said.

“The other thing that excites me is the advent of the nuclear build programme, which should enable a full-time workforce that is fully engaged. There will be funding coming through to Necsa that will ensure we carry out our side of the mandate.”

Nuclear new build programme

Necsa is set to become a major player in the controversial 9.6 GW nuclear new build programme, with Joemat-Pettersson updating Parliament on Tuesday on the matter.

Her announcement on Monday that Cabinet will review the much-delayed Integrated Resources and Energy Plans is one of the final puzzle pieces before the nuclear request for proposals can be released to bidders like Rosatom and France’s EDF and Areva.

FULL STORY: Cabinet to finally review SA energy plan this week

The final countdown towards nuclear energy procurement seems to be occurring, and Necsa believes the environmentalists’ court challenge against the Department of Energy won’t delay matters.

Earth Life Africa Johannesburg (ELA) and the Southern African Faith Communities’ Environment Institute (Safcei) planned to take legal proceedings against the Department of Energy over an agreement signed with Russia’s nuclear firm Rosatom ahead of the official procurement process.

“I don’t see it holding up the programme,” said Tshelane. “What could delay the programme is a concerted campaign to keep government and ourselves in court for many months, which of course they will try to do. They are not interested in the facts, but stopping nuclear by all accounts.”

No deal, says Rosatom

Last week, Viktor Polikarpov, who is Rosatom's regional vice-president for sub-Saharan Africa, told Fin24's Lameez Omarjee that legally, there is nothing in the agreement between Rosatom and the Department of Energy that indicates a nuclear deal has been concluded.

FULL STORY: Civil bodies have no nuclear legal case - Rosatom

In Rosatom’s point of view, there is no indication in the agreement that a nuclear deal was concluded.

“When you read the agreement itself, you will see that it is very general and does not contain any signs of a deal from a legal point of view,” he said.

The agreement contains elements of intent. “It contains the element of a proposal and the spheres of cooperation, nothing else. From a legal point of view, there is nothing you can charge.”

Environmentalists waiting on court

In response, the environmentalists told Fin24 that ELA-Jhb and Safcei do not want to become embroiled in legal argument in the press relating to its court challenge.

It said it “looks forward to the Russian agreement and its tabling in Parliament and the various other grounds of challenge being subjected to judicial scrutiny when the high court hears this matter on December 13 and 14 2016”.

“This case is about whether the decision-making process undertaken by government, and in particular by the minister and Nersa in the 2013 s 34 Determination in deciding to procure 9.6 GW of nuclear energy, was conducted in a lawful and constitutional manner,” said the ELA’s Makoma Lekalala.

“If this nuclear deal goes ahead, our children and grandchildren will bear the costs," said Lekalala. "Not only will our electricity bills soar to pay for this nuclear folly, but we will have to pay back the debt - and where will the money come from for schools or tertiary education?”

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