Public Enterprises Minister Barbara Hogan drew the final curtain yesterday on SA's bid to be a leader in nuclear technology when she announced the closure of the pebble bed modular reactor (PBMR), which has cost R7,4bn of taxpayers' money.

The government's decision to stop investing in the project supersedes its previous decision to downsize the PBMR company by 75% to allow it to continue for up to three years to service its obligations. The decision to terminate operations means the remaining staff will be retrenched, joining about 600 employees who left after the downsizing decision.

The PBMR's laboratory and testing facility will be decommissioned or mothballed.

Ms Hogan said in a statement in the National Assembly that fiscal constraints imposed by the recession and the government's developmental priorities were some of the reasons for the decision. The PBMR project, which began in 2000, will continue on a "care and maintenance" basis. "The scale and size of the company is being drastically reduced to a handful of people, with the focus being on the retention of its intellectual property, and of certain skills, and the preservation of its assets," she said.

Opposition parties welcomed the decision but were critical of what Independent Democrats chief whip Lance Greyling called "a momentous waste of resources".

Other reasons cited by Ms Hogan for the Cabinet's decision were that the PBMR had not been able to secure an anchor customer or another investment partner and the project could require further investment of over R30bn.

Deadlines had been consistently missed, "with the construction of the first demonstration model delayed further and further into the future".

Hopes that a successful bid by a US consortium - which included Westinghouse, one of the PBMR's partners - for the US's next-generation nuclear plant programme would give the PBMR a new lease of life were dashed when Westinghouse withdrew in May.

Ms Hogan said if SA were to embark on a nuclear build programme in the near future, it would not use pebble-bed technology. The PBMR project has cost R9,2bn over 10 years, with 80,3% coming from the state. Eskom contributed 8,8%, Westinghouse and the Industrial Development Corporation 4,9% each, and Exelon 1,1%.

Ms Hogan said efforts would be made to keep nuclear skills in SA, though some loss was unavoidable. There was no doubt about the validity of pebble-bed technology.