New revelations in SA nuclear deal

16 September 2016

Cape Town – The department of energy was tight-lipped on Friday over the awarding of a tender for the controversial nuclear build programme to the son of a close friend of President Jacob Zuma.

When approached for comment, departmental spokesperson Thandiwe Maimane said by email: "For now the department of energy will not be commenting further on the matter.

The Mail & Guardian reported that Shantan Reddy, the son of flamboyant businessman Vivan Reddy, was the recipient of a R171m contract by the department of energy. The contract appears to be the first transaction in the multi-billion rand nuclear deal, despite earlier assertions Energy Minister Tina Joemat-Pettersson that South Africa has not yet entered into any such a deal. The tender was published on the DoE’s website under the category “Awarded Bids”. The bid number BAC-10/16 appeared under the heading as well as the company name Central Lake Trading 149, which trades as Empire Technology.

According to the Mail & Guardian, Empire Technology can be traced back to the Edison Power Group – a company owned by Vivian Reddy of which Reddy Jnr is the deputy chairperson.

The DA’s spokesperson on energy Gordon Mackay told Fin24 by phone that the tender awarded to Shantan Reddy appears to be for a "system" that will manage the nuclear build project.

Besides the fact that the said contract is highly irregular, as the minister and Deputy President Cyril Ramaphosa maintain there is no nuclear deal yet, it begs the question why the department of energy is getting involved with the build programme, Mackay said.

According to him, the proposed nuclear deal consists of two parts – the transaction itself, including requests for proposals and the preparation of the contracts; and the build programme for which Eskom is responsible.

“If it’s not the department’s mandate to get involved in the build programme, then why are they awarding a contract for project managing the build programme in the first place?”

Mackay said the contract to Shantan Reddy is also irregular because no money has been allocated for this purpose in Finance Minister Pravin Gordhan’s budget. "In the budget this year R200m was allocated to the department of energy specifically for costs around the transaction and preparation for it. A lot of work was done for the request for proposals, but no money was allocated for the build programme. Where does this R171m to Reddy come from?" Mackay said.

Enquiries that the Mail & Guardian submitted to the department of energy revealed that the tender hadn’t been advertised, as it formed part of “the Free State tender”. It’s however unclear why the department would use the Free State tender to issue preparation contracts for such an expensive project, such as the nuclear programme.

Meanwhile, South Africa’s nuclear procurement programme would officially kick off on 30 September, which will pave the way for interested parties to submit their tender documents for participation.

This article first appeared on Fin24, see here.