₦airaland Forum

Geopolitics Key to South Africa’s $100 Billion Nuclear Plan
By Paul Burkhardt and Franz Wild Dec 22, 2014 3:41 PM


“Geopolitical and industrial relations between South Africa and the nuclear-vendor countries will play an important role,” Des Muller, the head of Johannesburg-based building company Group Five Ltd.’s nuclear construction division, said in an e-mailed response to questions Dec. 17. “It does with all major infrastructure projects and more so on nuclear infrastructures where reliance on nuclear safety and construction knowhow is paramount.”

South Africa could pay as much as $100 billion spread out over a period of 15 years for nuclear reactors to provide 9,600 megawatts of power, Muller said. The continent’s biggest electricity user is trying to make up for more than a decade of underinvestment in power generation, which is already leading to recurring blackouts and stifling investment in the economy, which relies on energy-intensive industries such as underground mining and the smelting of chrome and aluminum.

Atomic Power Looking Better and Worse

The government hopes new nuclear plants can help it reduce its reliance on coal for about 80 percent of its power and address future energy needs as aging infrastructure needs replacing.

Revitalize Industry

“The South African government has stressed that through the new build process we wish to revitalize a nuclear industry in South Africa with a view to long-term self-sufficiency,” Xolisa Mabhongo, group executive corporate services at the South African Nuclear Energy Corp., or Necsa, said in an e-mailed response to questions. “Therefore localization is one of the key considerations.”

Eskom Holdings SOC Ltd., South Africa’s state-owned utility that generates about 45 percent of the continent’s electricity and has installed capacity of about 42,000 megawatts, runs the 1,800-megawatt Koeberg nuclear plant, which supplies half of the Western Cape province’s power. The company is spending 500 billion rand ($43 billion) through 2017 adding 11,000 megawatts of capacity to the grid, including new power plants Medupi and Kusile, and servicing an aging fleet of plants.

The country’s Pelindaba nuclear research plant near the capital, Pretoria, is home to the world’s second-largest manufacturer of medical radio-isotopes that help diagnose and treat some cancers. It’s also the site of a weapons program that resulted in South Africa becoming a nuclear power during apartheid. The country has since dismantled its nuclear weapons.

Head-Start

Russia may already have a head-start as PresidentJacob Zuma fosters stronger economic cooperation with the country and China in a shift from his western and Africa-leaning predecessor Thabo Mbeki, Robert Besseling, a Johannesburg-based analyst with IHS Country Risk, said in an interview. The Soviet Union and then Russia historically kept close ties with the ruling African National Congress from the days in which it was battling against the apartheid regime.

Under Zuma’s watch, South Africa was incorporated into the BRICS alliance with Brazil, Russia, India and China.

“Considering the much-stronger relationship between the Zuma presidency and the Russian government than under the previous South African administration, it looks much more likely that the expansion of the nuclear program will be awarded to Russia,” Besseling said.

Agreement Negotiation

Zuma has already been attacked by newspapers including the Johannesburg-based Mail & Guardian and the opposition Democratic Alliance. He personally negotiated a September framework agreement with Russia, including only his closest advisers, the Mail & Guardian reported on Sept. 26, citing government and ANC officials it didn’t identify. The president’s office denies this. The Democratic Alliance is appealing the denial of its request to see the document through the Promotion of Access to Information Act.

After signing agreements allowing for nuclear cooperation with Russia, France, the U.S., China and South Korea, and conducting technical workshops with delegations from the countries, the Department of Energy has met with companies from those countries to discuss the most important elements in the project: technology, safety, financing and how much of it will be built locally. The department is in the process of determining the procurement rules, including whether the bidding process will be open to anyone or by invite only.

‘Upper Hand’

“The political relations could trump the technical” on a national and global scale, Anne Fruhauf, southern Africa analyst at New York-based risk adviser Teneo Intelligence, said in a phone interview. Russia is the frontrunner, not least because of Zuma’s stronger orientation to the Brazil, Russia, India and China block, South Africa is a part of, Fruhauf said. “A joint bid between the Chinese and French could perhaps give them the upper hand,” she said.

ANC spokesman Zizi Kodwa’s mobile phone wouldn’t take any answer-phone messages and he didn’t respond to e-mailed questions.

France’s Areva this year beat Toshiba Corp.’s Westinghouse Electric to a 4.3 billion-rand contract to replace steam generators at South Africa’s Koeberg nuclear plant.

That experience and a failed court appeal of the decision has left Westinghouse unsure whether it will bid for the larger nuclear project.

“Westinghouse is considering our options at this time based on our recent experience in RSA and on our experience in the last round of bidding for new nuclear plants in RSA,” the nuclear-power builder said in a Nov. 21 reply to questions, referring to the Republic of South Africa. “Nuclear projects are very large and can impact international relationships between the associated countries.”

Arms Deal

There are 37 of Rosatom’s VVER reactors that use pressurized water operating outside of Russia, including 18 units in five European Union countries, according to the company. Areva has built more than 100 reactors around the world, with its EPR design under construction in Finland, France and China. Westinghouse said its AP1000 reactor uses “the world’s safest commercial technology.”

One risk is that the billions involved in the nuclear program could become fertile ground for corruption, according to Fruhauf. “The scale of the commitment and the potential for corruption is there for all to see,” she said. “The administration must ensure a competitive process to avoid allegations of wrongdoing.”

Graft Conviction

It wouldn’t be the first time. South Africa’s $4.2 billion purchase of jets, warships and helicopters from companies including ThyssenKrupp AG and BAE Systems Plc, agreed in 1999, is being probed by a judicial commission following persistent allegations of corruption in the awarding of the contracts.

In 2003, Tony Yengeni, a former lawmaker for the ruling ANC, was found guilty of defrauding parliament by failing to disclose a discount on a luxury car from one of the companies bidding for the arms contract.

Splitting the bid is “definitely possible,” though limited by whether the difference in technology between countries would be economically feasible, Viktor Polikarpov, Rosatom’s regional vice president for central and southern Africa, said in an e-mailed response to questions.

“One must also take into consideration that the depth of localization and the volume of technology transition is in direct correlation to the number of reactor units built by a single vendor,” he said.



http://www.bloomberg.com/news/2014-12-21/geopolitics-key-to-south-africa-s-100-billion-nuclear-project.html

simplemach:
Another goodnews from the GEJ led administration. May GEJ rule until i cease to be a Nigerian and become Biafran.

It wasn't the work of GEJ but that of Yaradua.
After the commissioning we need peace in that area. Those people claiming that precious place belongs to them should rethink and re-look their maps Kashimbila (Gashimbila) isn't in Benue but Taraba and am a descendant of that ....

.

gowaga68:
It wasn't the work of GEJ but that of Yaradua.
After the commissioning we need peace in that area. Those people claiming that precious place belongs to them should rethink and re-look their maps Kashimbila (Gashimbila) isn't in Benue but Taraba and am a descendant of that ....

and you dont see anything good in completing an already started project. Come to kaduna and see how many projects started by Yakowa have been abandoned by this fowl Ramalan Yero.

liberty300:
If only buhari would tell us how he would help improve our lives not how he would jail politicians and go on a revenge mission to get those that kicked him out of power

Thanks a lot lot! My mind, my signature.

simplemach:
and you dont see anything good in completing an already started project. Come to kaduna and see how many projects started by Yakowa have been abandoned by this fowl Ramalan Yero.

Never said so but the glory should be shared between the starter and the finisher and not forgetting a lot got to be done on security issues regarding that location I know what has been going on there.
The Tiv around that area should be warned that that place isn't located in Benue but Taraba without a solid agreement between the two side I don't think the dam would serve its purposes .

ellechrystal:
Great. I wish him al d best.
Merry Xmas my Niralanders . May ur days b bright.
Enjoy in peace. N ve a prosperous n peaceful 2015. Boko , ISIS and all d terrorists of d world won't c any of us in Jesus name. We shall ve good news all d way.
Love u all muuuuahhhhhh

if I talk say I love you pass, na ISIS you go send me.
*****jeje dey play my candy crush******

ejikeme:
if I talk say I love you pass, na ISIS you go send me.
*****jeje dey play my candy crush******

Lmao.. 4 wetin na. Hope ur enjoying d season.

ellechrystal:
Lmao.. 4 wetin na. Hope ur enjoying d season.

enjo abeg, the East is boring. I for jeje go scout mubi....

theshadyexpress:
Gej commisioned a rail line yesterday but I'm. Sure u didn't like dat kinda news because of ur hatred for him

GEJ till shekau turns pope

sure I do.