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Vendor concern about the future of the nuclear build

May 28 2017 06:00
Peter Luhanga

Johannesburg - The five nuclear vendor nations that had previously signed intergovernmental agreements with the South African government were anxious about the future of the nuclear build, according to Energy Minister Mmamoloko Kubayi.

The five countries that signed agreements with the government were: China, France, Russia, South Korea and the US. Last month, a judge set aside all the agreements.

Kubayi said during an interview the five countries were definitely anxious and had communicated their anxiety with her department’s director-general, Thabane Zulu.

“They [the countries in question] were worried what does it [the high court ruling] mean with their current work, and in terms of their interests going forward, they wouldn’t want to find themselves kicked out of the market in terms of competition.

“All of them wanted to know if we are signing with one or does it disadvantage them in terms of the competitive space in South Africa. We had to reassure them that we would not act in any way that compromises them and that we will make sure that we are transparent and that they are not closed out of the market,” she said.

Even though she felt that the court went beyond its call, she agreed with some aspects of the ruling, saying her department could have done better when it came to the nuclear agreements in terms of parliamentary participation by bringing the agreements to be ratified by Parliament.

“Government must not commit itself outside the country without ensuring that the legislature has an oversight over it that we agree with, but on policy I just think the court should have really restrained itself,” she said.

Now, she said the entire process of the nuclear build programme would start from scratch.

The process of signing new agreements will begin next month and these will have to be sent to Parliament in terms of the law and the Constitution “that ... we have to comply with”, Kubayi said.

Also, new determinations had to be reissued, resigned and sent to the National Energy Regulator of SA, which would undertake wider public consultations.

“We have committed ourselves to transparency and accountability,” she said.

On embattled state-owned PetroSA, she said that the process between the PetroSA board and the Central Energy Fund (CEF) was under way.

PetroSA has suffered huge losses over the past three years and has a projected loss of R2.2 billion for the year ending March 2017.

The CEF was to submit a report by the first week of June and, in terms of its recommendations, the minister will be able to give indications of how her department is going to deal with challenges at PetroSA. But the restructuring of the CEF group, where “we are looking at removing the boards in terms of subsidiaries and have one entity, this should be able to assist us in responding to the challenges of PetroSA”.

Regarding the sale of South African oil reserves, she said she had received a report on the sale.

Last year, 10 million barrels of government oil reserves were sold for a price less than market value.

Kubayi said she would be appearing before a parliamentary portfolio committee on May 30 to table the report and deal with the details, but had assigned Zulu to go into CEF as acting CEO to assist in looking at the implementation of the report in terms of investigations to determine whether “we will go to the Special Investigating Unit or call for the Hawks to come in – that will depend [on] what work we are going to do”.

On the proposed development of a new gas pipeline from northern Mozambique to South Africa, she said she would not be able to go into detail about the project, other than to say negotiations were under way and that South Africa would pay full costs of the pipeline to bring gas to South Africa.

“We definitely have to move that gas from the Rovuma basin into South Africa.”

As for what she thought about Eskom not signing 37 contracts with renewable energy producers, the minister said a team had been set up to resolve the issues related to the contracts.

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