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Cabinet decides to start the nuclear procurement programme: Tumisang Ndlovu – journalist, Moneyweb

Pravin Gordhan has stressed affordability remains top of mind.

SIKI MGABADELI: Newly reappointed Finance Minister Pravin Gordhan has sought to reassure that South Africa’s nuclear programme will be in accordance with the law.

PRAVIN GORDHAN: There is I think the decision on Wednesday that we are going to move in the direction. .

TUMISANG NDLOVU: This gives way for the Department of Energy to call for proposals. Energy expert Chris Yelland shares his views on the matter.

CHRIS YELLAND: The next step of course is an open, transparent, competitive procurement process as required by the Constitution, as required by the Public Finance Management Act. There will be a number of bids on the table, bids that are specific to South Africa’s needs, bids that will detail not only the technical requirements, the timelines, but also the financing arrangement.

TUMISANG NDLOVU: Gordhan on the other hand has stressed affordability remains top of mind.

PRAVIN GORDHAN: As I said earlier on, we will only do things – whether it’s nuclear, whether it’s anything else – that are affordable. We can’t spend money that we don’t have, and we can’t make commitments when we know we are not going to get the money that is required to be spent in this particular regard as well.

TUMISANG NDLOVU: This follows reports that former finance minister David van Rooyen signed off on this during his four-day tenure. But analyst Aubrey Matshiqi says this is highly unlikely.

AUBREY MATSHIQI: When it comes to the nuclear deal, I think that’s a much more complex process involving, I think, about five countries, and South Africa being the sixth. It is highly unlikely that they would have signed off on that deal.

TUMISANG NDLOVU: Gordhan replaced the relatively unknown Van Rooyen, who last week replaced Nhlanhla Nene. Nene has in the past said that nuclear energy would not be procured if South Africa could not afford it.

NHLANHLA NENE: The cost to the consumer also becomes an issue. So the availability of resources also for us becomes an issue and therefore it is why…following due processes become critical. So for that reason you can’t stand up and say you can’t afford it because of course we haven’t concluded. There are studies that have been made, and the processes that the Department of Energy have gone into have involved countries coming up with how they would be able to deliver the project.

TUMISANG NDLOVU: The ANC also raised its concerns with a resolution passed. The governing party’s National General Council in October called for a full, transparent and thorough cost-benefit analysis of nuclear power. Meanwhile opposition party the DA has responded to the latest developments. The party has described Cabinet’s decision to go ahead with procurement worth R1trn and bypass parliamentary process as irrational. Yelland agrees, given the country’s current economic climate.

CHRIS YELLAND: It all depends on the question of affordability and how this is going to be funded. And is South Africa ready to put a major part of its energy future in the hands of foreign vendor countries?

TUMISANG NDLOVU: The DA has also raised questions over the legality of Cabinet’s decision, further saying government also still has to complete and make public a detailed cost analysis, as well as the impact of nuclear energy on the long-term price of electricity.

Tumisang Ndlovu reporting for Moneyweb.

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