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Rosatom remains upbeat about nuclear after Eskom cans RFI

May 04 2017 09:22
Matthew le Cordeur

Cape Town – Russian state-owned nuclear company Rosatom acknowledged Eskom’s decision to terminate its request for information (RFI) and said the court ruling last week had no direct relation to it.

“Although we still believe that the recent RFI was only intended for information gathering and to further enable transparency in the procurement procedure, and was therefore a timely and necessary step, Rosatom acknowledges its termination as announced by Eskom,” a Rosatom official told Fin24 on Wednesday.

“Rosatom confirms its willingness to participate in any further procedures that may be brought forward by the relevant authorities of the Republic of South Africa and remains committed to participating in a transparent and competitive procurement procedure should and when it arises.”

Eskom chief nuclear officer David Nicholls tweeted on Tuesday that Eskom had officially terminated the RFI process, which was due to be completed last Friday. However, a court ruling two days previously on April 26 stated that the nuclear procurement processes to date were unlawful and set aside.

READ: Eskom terminates nuclear request for information

Asked for an official statement to confirm the tweet by Nicholls, Eskom told Fin24 on Wednesday: “The RFI was set aside by the court ruling last week and as such Eskom cannot provide details of the process. Furthermore, Eskom cannot comment on the nuclear new build process and will follow the direction of the Department of Energy on the matter.”

This follows the court ruling which set aside two ministerial determinations, set by former minister of energy Tina Joemat-Pettersson, that South Africa should procure 9 600 megawatts of nuclear power and that Eskom should be the procurer. That means the role has reverted to the Department of Energy, removing Eskom’s part in the process.

READ: Nuclear deal brought to its knees

The Rosatom official also noted the Western Cape High Court decision, but said it has “no direct relation to Rosatom”.

“The determination refers to the internal ratification procedures of the Parliament of the Republic of South Africa for three government-to-government agreements signed in 2014 with Russia, South Korea and the USA.

“This determination does not directly affect the scope of these agreements, which is the cooperation with the Republic of South Africa in terms of nuclear power development for peaceful purposes.

“The Republic of South Africa and the Russian Federation are both International Atomic Energy Agency member states and have successfully been cooperating in the area of nuclear since 1995.

“More importantly, there is a duly ratified and acting government-to-government agreement on peaceful uses of nuclear energy which was signed between the two states on November 20 2004.

“We are confident in our world class technology, unmatched safety standards and highly competitive solutions,” the official said.

The positive response from Rosatom follows Democratic Alliance energy spokesperson Gordon Mackay’s view that the ruling will be met with “great unhappiness” in the Russian camp and its firm Rosatom.

Russia – whose state-owned firm Rosatom is seen as the frontrunner of the nuclear deal – was at the centre of the court ruling.

Mackay said South Africa can “expect a push back” as Russia “has been courting the South African government for well over a decade now, especially if one takes into account that the Cabinet reshuffle was to expedite South Africa’s nuclear procurement plan”.

Full story: Nuclear ruling to cause 'great unhappiness' in Russian camp

Nomura economist Peter Montalto said last week that Eskom’s accelerated timetable of a request for proposals by June and signing a deal by the middle of next year to start construction by 2019 was “simply too aggressive, yet its nuclear ambitions are unlikely to be killed off”.

“If President (Jacob) Zuma is really under so much pressure from others to move forward with nuclear power, there is a small tail risk that Eskom and the government (will) attempt to push ahead and sidestep the courts.

“While no other vendor would deal with Eskom when there was a judgment against it and rule of law issues, Rosatom may well have a higher hurdle on such issues.”

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