Jacob Zuma’s secret nuke ‘stitch-up’

As the government scrambles to limit fallout, we reveal how Jacob Zuma grabbed control of the R1tn deal and negotiated directly with Vladimir Putin.

President Jacob Zuma personally negotiated a nuclear deal with his Russian counterpart, Vladimir Putin, say highly placed government and ANC sources. This ensured that the intergovernmental agreement announced with fanfare this week took all but his most trusted and intimate inner circle by surprise.

A senior ANC leader, who Zuma entrusted with intimate details of the negotiation with Putin, said that Zuma had ironed out details directly with the Russian president on the sidelines of the Brics (Brazil, Russia, India, China and South Africa) summit in Brazil in July, and finalised details of the pact during his highly secretive visit to Moscow last month.

“It was simple. When Zuma came back from Brazil, it was done,” the senior ANC leader said.

The party leader and another well-placed ANC MP added that the details of the deal were finalised during Zuma’s trip to Russia in August.

The two sources said that Zuma subsequently instructed energy minister Tina Joemat-Pettersson to sign the deal with the Russians on the sidelines of the general conference of the International Atomic Energy Agency (IAEA) in Vienna.

A joint statement issued by the Russian state-owned nuclear company Rosatom and the South African energy department on Monday said that the agreement “lays the foundation for the large-scale nuclear power plants procurement and development programme of South Africa based on the construction in South Africa of new nuclear power plants with Russian VVER reactors with total installed capacity of up to 9.6GW (up to eight [reactor] units)”.

Deputy energy minister Thembisile Majola told Parliament’s energy portfolio committee, which met on Tuesday, that she had no knowledge of the nuclear deal and had first learned of it through the media.

The chairperson of the committee, Fikile Majola, said that he would call Joemat-Pettersson to explain herself to the committee. “We want her to tell us the details surrounding the deal,” he said.

Shrouded in secrecy 
Sources also said that the minister and Zuma did not take the ANC’s national executive committee (NEC) into their confidence over the matter. Four NEC members independently said that there was no mention of an impending nuclear agreement with Russia at last weekend’s meeting. 

One added that some senior party figures were unimpressed that Zuma, instead of resting in Russia as initially planned, had negotiated deals that had not been agreed to by the leadership. He said Zuma only gave details of the deal to his most trusted Cabinet ministers and MPs.

This week’s announcement also startled politically connected nuclear lobbyists and industry insiders, some of whom frantically exchanged calls in a bid to understand its significance.

A respected nuclear industry leader said the statement looked “pretty definitive”, and news that Russia had clinched a deal to build nuclear reactors blazed unchecked across radio and television bulletins, as well as social media.

The announcement was followed by an apparent damage control exercise. A rival to Rosatom said that they had received written assurances on Tuesday morning from a leading member of the South African delegation to the IAEA conference in Vienna that “there will be other intergovernmental agreements signed with the other vendors before the procurement process will start”.

A new statement issued solely by the department of energy on Tuesday evening said that the agreement “initiates the preparatory phase for the procurement for the new nuclear build programme”.

“Similar agreements are foreseen with other vendor countries that have expressed an interest in supporting South Africa in this massive programme,” it said. “Joemat-Pettersson will lead a delegation to visit France, where bilateral discussions will culminate with the signing of a co-operation agreement between the two countries [and] the South African government is also in discussions towards concluding an intergovernmental agreement with the Chinese government.”

Russia leads the race 
But Zuma’s personal involvement with Putin means that even if similar agreements are concluded with other states, the Russians must be considered clear frontrunners.

Rosatom told the Mail & Guardian that Monday’s joint statement was “intended to solely serve as information on the agreement and not necessarily position Rosatom as a preferred bidder”.

“The agreement stipulates the overall development of various fields of nuclear power industry, and supplementary agreements will be signed in each field stipulating all details,” added a spokesperson.

Senior government and industry sources have been telling amaBhungane for the past 18 months that Zuma has taken a personal interest in the government’s planned procurement of 9?600 megawatts (an estimated R1-trillion’s worth) of nuclear power, regarding it as one of his “presidential legacy projects”.

A senior government official said that Zuma and Putin made initial strides towards a nuclear deal at the Brics summit in Durban in March 2013, but hammered out the details during Zuma’s working visit to the Russian Black Sea resort of Sochi in May last year.

The M&G reported that Zuma had slipped into the driver’s seat the following month, replacing his deputy at the time, Kgalema Motlanthe, as chair of the national nuclear energy executive co-ordinating committee.

A month later, Zuma replaced energy minister Dipuo Peters with Ben Martins, in a move widely seen as being intended to tighten control over the nuclear procurement process and tie up a deal with the Russians.

Joemat-Pettersson took over from Martins in May this year.

Draft agreement
According to the official, a draft nuclear co-operation agreement began to circulate between the Russians and the South Africans in July last year. Initiated by the Russians, this apparently sought a commitment from the South Africans to deal exclusively with them. It allegedly contained four clauses that particularly alarmed South African government officials. They included:

Limiting South Africa to acquiring Russian reactor technology;  Giving Russia exclusive say over the auxiliary construction contracts; Giving Russia a 20-year veto on South Africa doing business with any other nuclear vendor countries; and Making South Africa exclusively liable for all nuclear equipment procured from Russia as soon as it left that country. 

“These clauses either flouted sections of our Constitution, which guarantees an open, competitive and transparent bidding processes, or they were not in our national interest,” said the source.

The Russians were said to have pushed “aggressively” for the signing of the agreement, first at the G20 summit in St Petersburg in September last year and again before the Atomex nuclear conference, hosted by Rosatom, in Johannesburg in November. But South African concerns about the proposed exclusivity and liability clauses are said to have stymied an agreement.

At the two-day G20 summit, South African and Russian officials were unable to agree on key clauses in the nuclear co-operation treaty, including those relating to its financing.

The M&G has learned reliably that Zuma summoned then finance minister Pravin Gordhan, who had accompanied him to the summit, to a meeting and appealed to him for the necessary financial commitments. Gordhan apparently declined and warned Zuma such a step would be unwise.

Gordhan could not be reached for confirmation on Thursday.

Initial agreement
In October last year, ANC secretary general Gwede Mantashe and treasurer general Zweli Mkhize accompanied a delegation of ANC-aligned businesspeople from the Progressive Business Forum on a four-day visit to Russia. The ANC signed a memorandum of understanding with Russia’s ruling United Russia party.

The M&G has previously reported that, before the Atomex conference, Russian state-owned media claimed a nuclear reactor deal was a fait accompli. News agency RIA Novosti reported as fact that Rosatom “are to build eight nuclear electricity units in South Africa. Formal agreements about this are to be signed … on the fringes of Atomex”.

But what was released at Atomex was a memorandum of understanding between Rosatom and the South African Nuclear Energy Corporation.

A protester in front of a Rosatom building in Russia. (Alexander Nemenov, AFP)

Martins promised at the time that a co-operation agreement would be signed early this year, pending the finalisation of “legal procedures”.

After Atomex, a source said energy department officials had stopped answering Rosatom’s calls, suggesting that the Russians had overstepped the mark or that major South African government decisions were then placed on hold until after this year’s elections.

After the May poll, Zuma removed Martins, who had held the position for less than a year, and replaced him with Joemat-Pettersson.

Presidential loyalty
Several M&G and amaBhungane sources said that she was seen as being more loyal to the president than her predecessors and more likely to deliver the outcome required on the nuclear deal.

It is not clear whether the agreement signed on Monday differs materially from the draft haggled over by the Russians and South Africans last year.

Xolile Mabhongo, a member of the South African government delegation to Vienna, told Business Day on Thursday that the veto clause had been removed from the signed agreement. He also said that the text of the new agreement would not be made public.

But the announcement reveals the Russians have finally managed to get South Africans to put pen to paper, stretching their lead in the race for the trillion-rand nuclear tender.

Presidential spokesperson Mac Maharaj did not respond to questions. – Additional reporting by Sarah Wild & Pauli van Wyk

Qaanitah Hunter is an M&G political reporter and Lionel Faull is an investigator with the M&G Centre for Investigative Journalism.

Long and winding road to a nuclear nation

Politically, South Africa and Russia seem determined to get a nuclear build deal done with unseemly haste. But there are many obstacles to it becoming a reality.

 Before South Africa can start building nuclear power plants, Parliament must ratify every step of the process, from the broad country-to-country agreement down to the allocation of money. 

Two regulators, those for electricity pricing and nuclear power respectively, must sign off on specific details, and they are bound by their own statutes and rules on fairness and justifiability. The flow of vast sums of money to foreign suppliers, and the accompanying currency hedges, are subject to financial regulations. 

There are stringent local requirements for environmental impact assessments and consultations with the communities involved (Bantamsklip and Duinefontein in the Western Cape and Thyspunt in the Eastern Cape are currently proposed sites for the nuclear stations). 

The fairness of tenders – to bidders, but also the citizens ultimately doing the buying – is a constitutional imperative, giving the courts broad powers to review processes if an interested party cries foul. 

Nuclear build and the manufacture and transport of nuclear fuel are subject to a tangle of international agreements on nonproliferation and safety. South Africa has agreed to adhere to the International Atomic Agency’s 19 milestones for a nuclear build, an anomaly for a country that has an existing nuclear programme. 

They include securing the money to deal with nuclear waste and the decommissioning of the power plants decades down the line, and having a human resources plan to make sure there are enough skilled people to run the proposed fleet.

 The guidelines also include a very practical (not to mention time-consuming and expensive) requirement about upgrading the electricity grid to deal with the start-up requirements and output of the new nuclear stations.   

Early this month, as the United States and the European Union moved to impose sanctions against Russia because of the conflict in the Ukraine, Russian nuclear company Rosatom argued that politics should play no part in decisions on nuclear energy. With safety and enormous sums of money involved, the company said “temporary disagreements” between countries should not be a factor. 

Between 1998, when South Africa started considering new nuclear build, and 2007, when Jacob Zuma ousted Thabo Mbeki as ANC leader, Russia was not considered a serious contender for any contracts. – Sarah Wild & Phillip de Wet

 

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SA resolute on nuclear build

OFFICIALS from the Department of Energy on Wednesday stated categorically that SA would procure 9,600MW of nuclear energy despite the government not having an accurate understanding of what this might cost either the fiscus or consumers.

The procurement would also go ahead despite the fact that the Treasury had not conducted an affordability study.

Department of Energy senior officials said at a media briefing in Pretoria that while a procurement process had not yet started, the procurement of 9,600MW of nuclear power would most definitely take place. The briefing was clearly aimed at dispelling talk that SA had signed a secret nuclear procurement deal with Russia.

The Treasury said at the weekend that it could not provide any idea of the cost for the project as it had not done any financial modelling or an affordability assessment.

Apart from the implications that a nuclear deal could have for SA’s fiscal position, it would also have far-reaching implications for consumers and business.

Tariffs would have to be set at levels needed to repay the finance raised to build the reactors.

The deputy director-general for nuclear energy in the Department of Energy, Zizamele Mbambo, said the tender for nuclear power “might not be an open tender”. It could be a closed tender or a government-to-government agreement.

To proceed with a procurement without the involvement and endorsement of The Treasury would be unprecedented and in contradiction of the Public Finance Management Act. The act is meant to “promote and enforce transparency and effective management of revenue and expenditure” of government and state-owned entities.

The Treasury said SA needed to tread carefully on the matter. “Nuclear power would be a substantial financial commitment, and government can only make that kind of commitment after careful and thoroughgoing modelling and an affordability assessment.

“The issues of how nuclear (procurement) would be paid for has not yet arisen because the process has not yet reached that stage.”

But Mr Mbambo said a technical committee was deep into the preparatory work for procurement. A decision not to procure, or to procure a lesser amount, was not an option on the table.

“I can confirm to you that there will be a procurement process,” he said. “Which procurement process is decided upon will depend on the models under consideration.

“Government will take a decision in the national interest. So, yes there will be a procurement process and once that has been approved that information will be communicated .”

Mr Mbambo repeatedly emphasised that nuclear procurement was not the same as any other, and that international experience showed countries made decisions based on “national interest”. In SA’s case, the national interest was to be energy self-sufficient and to develop the entire nuclear value chain from the mining of uranium to enrichment, to the disposal of waste.

He added that the localisation requirements would allow SA to promote industrialisation and create employment opportunities.

Acting Department of Energy director-general Wolsey Barnard said the intergovernmental agreement signed with Russia last week was “a potential framework of co-operation” and similar agreements would be signed with other vendor countries, in particular France, the US, Japan and China. An agreement is already in existence with South Korea.

Despite wording that strongly implied an agreement had been reached for Russia to supply eight nuclear reactors, Mr Barnard said this was not what was meant.

Last week’s agreement with Russia would not be made public until all the agreements were signed. Even then, some proprietary information would be withheld and the government would need to decide which information “was relevant to the public”, Mr Barnard said. In particular, aspects relating to the vendor country’s technology and the financial modelling “might not be made available”.

Mr Barnard said it was impossible to make a cost determination of the programme until the technology had been selected.

He implied, though, that as the “user-pays” principle was government policy, consumers would fund the programme through the tariff. “This is not something new,” he said. “The customer will pay just as (they ) will pay for renewable energy and the energy produced by Medupi and Kusile.”

The Department of Energy also cast some light on the prospective role of Eskom. While the nuclear policy of 2008 said Eskom would be “owner and operator” of the nuclear fleet, Mr Barnard said SA “might need to go a different route” and the final model chosen “would clarify the role of Eskom”.

Civil society organisations and political parties have already voiced their objections about the nuclear procurement process.

The selection of a power-generation technology without certainty on future demand nor established facts on cost implications was bound to spark opposition.

Lawson Naidoo, executive director of the Council for the Advancement of the South African Constitution, said that without transparency it would be impossible to assess whether the tendering process was fair.

“A key issue is the order in which things are done,” he said. “If government starts by saying there will be a procurement, it undermines all the other processes that need to take place.” Without seeing the full bilateral agreements with vendor countries, it would be impossible to be sure that the procurement process was not being tailored to suit a particular bidder, he said.

 

http://www.bdlive.co.za/business/energy/2014/10/02/sa-resolute-on-nuclear-build

 

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SA’s nuclear shame

3 October 2014 –

Mandy de Waal

Joseph Lepepe has been struggling for compensation or the time he worked in apartheid’s secret nuclear programme. Photo by Jon Pienaar.

News

After decades of fighting for compensation, workers from Pelindaba employed in the apartheid nuclear programme have caught the attention of Public Protector, Thuli Madonsela. The workers allege that they were exposed to chemicals and radiation that made them sick. They want Madonsela to bring their lengthy struggle for compensation to a close.

Joseph Lebepe has had enough. “I give interviews. I speak to people. But nothing happens. Why must I speak to journalists when nothing happens?” he laments during an interview with GroundUp.

Slight and bespectacled, Lebepe speaks to GroundUp with the assistance of a translator from outside a relative’s home in Atteridgeville, a township situated between Pelindaba and Pretoria. Born in 1951, the 63-year-old man looks considerably older than he actually is.

Recruited to work in the apartheid government’s nuclear programme at Pelindaba, Lebepe is one of hundreds of workers who have spent decades trying to get compensation after allegedly getting sick from working at the Atomic Energy Board, now known as The South African Nuclear Energy Corporation (NECSA). GroundUp reported on the matter in an article headlined Apartheid’s Nuclear Shame in June.

Lebepe was a handyman at Pelindaba from 1982 until 1985, and has been diagnosed with chronic obstructive airway disease. His eyesight is failing and he is extremely thin; he says he was much burlier in years gone by. Lebepe walks slowly and with a stoop; he says that nowadays he is too weak to walk any good distance. Like most of the Pelindaba workers who are seeking compensation, Lebepe was let go after he presented with symptoms of illness.

Decades have gone by and millions of rands of public funds have been spent on investigations, yet to date nothing has come of parliamentary probes.

But this could change now. On 29 September, Public Protector Thuli Madonsela met with workers in Atteridgeville.

Alfred Sepepe has been struggling for compensation or the time he worked in apartheid’s secret nuclear programme. Photo by Jon Pienaar.

“They interviewed all the people who are still alive,” Alfred Sepepe, an organiser for the group of former NECSA workers, told GroundUp in a telephonic interview. “The Public Protector told us that she would be back at the end of November this year. She told us she wrote a letter to NECSA and that she wants an answer from NECSA by 6 October,” Sepepe says.

“I told her she must help us.Ons is stukkend! (We are broken.) We have to go to doctors but we have no money to pay them. It has been too long. We need the PP’s help,” says Sepepe, who claims exposure to radiation at NECSA.

It has been three months since GroundUp published its story on Sepepe and hundreds of other workers, including Lebepe. Two of workers have died since. “I have to go to so many funerals. Since we last talked I have been to the funerals of another two people,” says Sepepe. “Already we have buried eight of our comrades; for them the fight has been too long.”

Sepepe says that Swartland Mahlangu, a man who was a permanent worker at the South African Nuclear Energy Corporation (Necsa), died on 25 June 2014. “Salomina Qube who was from the Winterveld, and who was a contract worker with Necsa died in July this year,” he says.

“Already we have buried eight of our comrades; for them the fight has been too long”

“I am collecting the death and birth certificates,” he says, adding: “My hart is seer” (My heart pains). “I see all these people are dying. No one in Swartland Mahlangu’s family is working; he was the sole breadwinner,” explains Sepepe. “The families, they come to me because they don’t know what to do. These families are sending me details and information in the hope that I may be able to help them. This man passed and the family didn’t even have money for his burial. It was terrible. They really struggled to bury this man,” Sepepe says with some measure of desperation in his voice.

Madonsela issued a statement after her visit to Atteridgeville in which she said she assured complainants her investigation was underway and that the matter would be fully investigated.

Sepepe is hopeful that the Public Protector will bring the investigation to a close, but he’s been to the Chapter Nine Institution’s office many times, over many years since this case first hit headlines in the mid 2000s. This matter has been sitting with the Public Protector’s office for some years now. An external expert was initially commissioned to prepare a research report, but the Public Protector wasn’t happy with the outcome.

“The external investigator was unable to meet the rigorous investigation and reporting standards required,” says Kgalalelo Masibi, the spokesperson for the Public Protector’s office. “As a result, no findings have been made, as findings would only be contained in the final report.”

In her latest statement on the matter, Madonsela says she told the complainants that while she was aware that their matter had been with the office for a while, the public hearings were a testimony that the investigation was underway.

The Public Protector called on other members of the public who were victims or knew anyone who had the same issue to approach the investigations team dealing with the matter. Nuclear activists predict that this could “open the floodgates” as they expect that hundreds more workers may now step forward.

Read more on Apartheid’s Nuclear Shame on Ground Up.

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R1,000,000,000,000 That’s a lot of zeros!

 According to some media reports the nuclear programme will cost South Africa between R300 billion and R1 trillion and is expected to be at full output 20 years after construction starts.

Just something to ponder on. If you were alive 2014 years ago and you spent R1 million every single day since that point, you still would not have spent R 1 trillion by now!

Besides this massive projected cost, do we need it? What alternatives are there?

LIVE INTERVIEW ON ‘THE VOICE OF THE CAPE’ FROM 19:15 MONDAY 6 OCTOBER TILL 19:58

Participating in this scheduled interview will be Mike Kantey of the Coalition Against Nuclear Energy (CANE) and Zizamele Mbambo, Deputy Director General in the Department of Energy.

“Not just Cabinet alone, but all sectors together should decide on energy policy in South Africa” says CANE.

CANE has been formed as an umbrella group comprising community organisations, residents’ associations, NGOs, academics, professionals, unionists, environmentalists and ordinary citizens now grappling with the spectre of nuclear developments in their back yards. They represent a groundswell of ordinary people who want government to act democratically in seeking alternative energy crisis and climate change solutions.

The Voice of the Cape – 91.3 FM Radio

The interview will be audible live on VOCfm website during the interview, via audio streaming @ www.vocfm.co.za/

The interview will be downloadable from VOCfm website two days after the interview @ www.vocfm.co.za/podcasts/

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Eastern Cape to be SA’s energy hub, says Peters

eskomTHE Eastern Cape is on track to become South Africa’s energy hub, as national power utility Eskom plans its first nuclear plant in the region at Thyspunt, near Cape St Francis, Energy Minister Dipuo Peters said on Monday.

Speaking at the Nuclear Africa conference in Johannesburg, Ms Peters said the government was willing to implement a nuclear energy programme with the urgency it deserved.

She acknowledged that the cost of the planned nuclear power programme had escalated but said the authorities had already included a price increase in their plans.

According to the minister, the delay in launching the nuclear power plant construction programme was due to the government’s desire to ensure South Africa obtained maximal industrial participation from the programme, which would help fulfil the objectives of the Industrial Policy Action Plan.

The Department of Energy’s Integrated Resource Plan 2010-30 includes 9.6GW of nuclear power.

“There is political will in this country to use nuclear for peaceful purposes,” Ms Peters said. “The reason we have to include nuclear in our plan is because we want to reduce coal and our economy is energy intensive.” Read More

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