SA’s plan to spend R2.3 trillion on mega coal and nuclear energy plants could lead the country into a series of dodgy energy deals.
|||Cape Town - South Africa’s plan to spend R2.3 trillion on mega coal and nuclear energy plants in the context of widespread tender corruption could lead the country into a series of dodgy energy deals that exacerbate poverty and contaminate the environment.
This was said in a report released yesterday by environment NGO Earthlife Africa, which warns that the huge projected Strategic Infrastructure Project Programme - of which electricity infrastructure makes up 67 percent - will require massively stepped up oversight by the national Treasury to ensure social and environmentally sound projects.
There will also need to be far greater public accountability to avoid repeats of the Arms Deal, the Pebble Bed Modular Reactor and the World Cup, which was “riddled with costs escalations, crony capitalism and marginal benefits for the poor”. So far, much of the proposed energy planning has been kept from the public.
The report says this is particularly so in the proposal to build 9 600MW of new nuclear power plants, between six to 10 new nuclear power stations, depending on the technology selected. “Only minimal information has been provided. The nuclear expansion programme was not discussed in the national Budget speech of 2012, or the 2011 and 2012 Medium Term Budget Policy Statements, the Minister of Finance’s 2012 Budget speech or the president’s 2012 State of the Nation address. The Department of Energy has refused to co-operate with civil society groups that seek transparent administration in this process,” the report said.
Yet the proposed nuclear programme is the single biggest state tender in South Africa’s history - five times larger than the Arms Deal at a conservative estimate. The government has put the cost of the nuclear programme at R300 billion. However, the report said if one included the “typical” time and cost overruns for nuclear plants, the nuclear price tag could exceed R1.4 trillion. This was roughly double the country’s projected tax revenue for the 20011/12 financial year.
“Given South Africa’s dubious history with regard to the procurement of mega projects, there are well-founded fears that a new nuclear-build tender will ignite a feeding frenzy, opening up unprecedented opportunities for corruption, political patronage and the abuse of state power for party political gain,” the report said.
In 1998, the projected cost of the “pocket nuke” reactor was R1.1bn. By 2009 estimates were R32bn. It was due to be completed in 2003. The project was eventually shut down in 2010 after it had used R8.6bn of the public’s money.
Under the New Generation Capacity Regulations of 2009, the Minister of Energy was given far greater power, which restricted the oversight job of the Treasury and made the system less transparent. “This raises concerns about how appropriately the minister can assess the cost effectiveness of the procurement process, without another party monitoring it… The minister is permitted to determine the tendering process as she chooses, and if she does not make any such determination, the procurer may determine the form of the Independent Power Producers procurement programme.”
The report criticised as outdated the electricity plan, the 2010 Integrated Resource Plan, containing energy choices which conflict with the National Development Plan, for instance where gas is preferred over nuclear energy.
Cape Times