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Gigaba confirms he didn't sign nuclear deal with Russia

May 26 2017 12:50
Matthew le Cordeur

Cape Town – Finance Minister Malusi Gigaba told Parliament this week that he has not signed a nuclear deal with Russia.

Gigaba responded to a written Parliamentary question this week after ANC member Sibusisiwe Mngadi alleged on Facebook days after Gigaba’s appointment that “the nuclear deal deadline was last night” and that the new minister had signed it.

She also alleged that President Jacob Zuma’s nephew Khulubuse Zuma would benefit from nuclear plants being built.

“Khulubuse Zuma is the SA holding company for the Nuclear plants. The next 20yrs Khulubuse Zuma will be making more than 50billion. Congratulations, mission accomplished,” she alleged on the post.

Treasury refuted the allegation on Twitter at the time. “There are no documents of deals ready for signature on nuclear. Therefore the reports are misleading and mischievous,” it tweeted.

Finance minister has no authority to sign nuclear deal - Gigaba

Now, Gigaba has officially told Parliament that no deal was signed.

“The minister of finance does not have the authority to conclude country agreements for the nuclear new build programme on behalf of government,” he said.

“In addition, the minister does not have the mandate to determine policy or implementation frameworks for the energy sector.

“The minister of finance’s role in this regard will relate to Sections 66 and 70 of the Public Finance Management Act, which requires concurrence for any guarantee, indemnity or security that binds the National Revenue Fund to future financial commitments.

“In addition, the Preferential Procurement Policy Framework Act allows the minister of finance to make exemptions from provisions in the interests of national security, if the likely tenderers are international suppliers, or if it is in the public interest.”

However, he said that if any agreements have been concluded regarding project management and the construction of specified nuclear power plants, it would be between the relevant accounting authority and the service provider.

“Such agreements do not necessarily require the approval of the minister of finance,” he said.     

Last week, Eskom chief nuclear officer David Nicholls told delegates at the African Utility Week that no secret deal had been signed.

The nuclear procurement programme was reset in May after a high court ruled that the process had been illegal.

Energy Minister Mmamoloko Kubayi announced she was restarting the process by signing new agreements with the US, China, South Korea, Russia and France in June.

READ: SA's nuclear procurement process to start afresh - Kubayi

The procurement programme will only begin officially when Eskom releases its request for proposals.

For this to occur, the following will likely still need to be done:

• Government must sign intergovernmental agreements with the relevant countries listed above, which will likely take longer than a month (perhaps even more than year), as announced by the minister. This will then need to be ratified by Parliament.

• Government must complete its updated national electricity plan (Integrated Resource Plan), which is undergoing public engagement and can only be completed in March 2018. The Department of Energy has indicated it might move ahead without completing this plan, but that would see a new court action launched.

• Regulator Nersa will need to hold stakeholder engagements and public hearings as part of a draft ministerial determination to procure nuclear energy.

• Once this is approved, the minister will gazette a ministerial determination to procure nuclear energy. This will likely also include assigning the procurement agent as Eskom and state-owned nuclear firm Necsa. This assignment was cancelled in the court ruling, so needs to take place again.

• Treasury will need to sign off on the request for proposal, before Eskom and Necsa can publish the documents. They will probably not publish a request for information as they did last year and move straight to this process. This will then be the official start of the nuclear procurement programme.

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