Energy Minister Ben Martins. Picture: PUXLEY MAKGATHO
Energy Minister Ben Martins. Picture: PUXLEY MAKGATHO

THE Russian government is pumping up the propaganda surrounding the country’s nuclear ambitions in South Africa with a series of reports on the official international broadcaster Voice of Russia that a deal has been struck to build South Africa’s planned nuclear power plants.

Several countries are jockeying for position in South Africa’s nuclear build programme, which envisages the construction of three nuclear power plants to supply 9,600MW at the cost of at least R1-trillion. The government has said the procurement process is close to finalised and there is high expectation among bidders that it will go ahead next year.

This week, the temperature over the nuclear build was further heightened when state-owned Russian corporation Rosatom hosted a nuclear suppliers’ forum in Johannesburg "with the aim of establishing and developing lasting partnerships in South Africa".

At the forum on Monday, a memorandum of understanding was signed between the Nuclear Energy Corporation of South Africa (Necsa) and a Rosatom subsidiary. They agreed to "develop strategic co-operation in engineering, design, procurement and construction of complex capital projects". They also agreed to jointly pursue "joint business opportunities" in South Africa and in other geographical markets.

While the memorandum on its own is not significant and does not imply that a commercial relationship will certainly follow, there are other indications that the relationship between Necsa and Rosatom is getting closer. It is believed that Necsa officials have been working with Rosatom in Russia for several weeks. Neither Necsa nor Rosatom responded to questions about this.

But despite the pedestrian nature of Monday’s agreement, the Voice of Russia made much of the occasion. Three days before the forum, the broadcaster reported on its website that formal agreements were to be signed at the forum, which would contract Rosatom to build eight nuclear electricity units, each with a generating capacity of 1.2GW.

When this did not take place, Voice of Russia said two days later that "Rosatom is prepared to build nuclear power plants in South Africa and set up research centres and train personnel".

"Russia and South Africa have already reached agreement to that end. Now the agreement should be declared legally valid. The contract is due to be signed on February 15 next year. Rosatom says it is prepared to co-fund the project."

Russia’s Energy Development Fund director Sergey Pikin is quoted in the article as saying that Russia has a more attractive offer than competitors as it has the ability to provide "the full cycle of services, from drawing up a project plan to rendering the maintenance service of the plant".

Energy Minister Ben Martins said repeatedly at Monday’s forum that no deal had been finalised with any contractor. Department of Energy officials also confirmed that the Necsa-Rosatom agreement had no bearing on the nuclear build programme.

The department is in the process of concluding fresh bilateral nuclear agreements with both Russia and France, which are on the verge of being signed. While these agreements are once again only statements of intent, it was notable that the draft Russian agreement, which Business Day has seen, had a veto clause, which would allow the parties to block the involvement of a third country.

Asked about this clause in an interview last month, Mr Martins’s adviser Robert Nkuna said the document was not final.

Mr Martins and several officials from the departments of energy, trade and industry and the Treasury are engaged in an intensive study tour to countries with nuclear power plant construction capacity. This week, Mr Martins was in Japan, after which he will visit the US. He recently visited Russia and France. South African officials will include South Korea in the "study tour".

While the government is making efforts to show that it has an open mind on the choice of a nuclear energy partner, the warming of relations between President Jacob Zuma and Russian President Vladimir Putin has raised concern among other bidders that "the Russians will try to steal the tender". The leaders have held three meetings in the past year and the African National Congress recently signed a party-to-party agreement with ruling United Russia.

One of the selling points being used by Rosatom to woo South African politicians and officials is its overt commitment to localised production and the promotion of industrialisation, which are key industrial policy aims of South Africa’s infrastructure build programme. The arms package procurement in 1998 featured "industrial offsets" as part of the tender and contracts to build the Medupi and Kusile power stations had localisation requirements, and so it can be expected that the nuclear procurement will include developmental objectives.

The Department of Energy’s determination to continue with the nuclear build programme comes despite a call for a rethink by the National Planning Commission, which has argued that the discovery of natural gas in Southern Africa and lower than expected energy demand renders the commissioning of nuclear power no longer urgent.

The department is expected to release a revised Integrated Resource Plan imminently, which may modify the nuclear build plans, but it has made it clear that it will continue with an energy path that includes nuclear energy as a significant component.

Neither the Russian embassy in Pretoria nor the Voice of Russia responded to requests for comment.