Why government's nuclear deal will destroy SA

15 September 2016

Johannesburg – The nuclear build programme will end up costing the South African economy over R3trn in debt, according to civil society group Organisation Undoing Tax Abuse (Outa).

The organisation released a video this week unpacking the economic impact of the deal. South Africa’s current debt level is at R1.89trn and a nuclear deal can escalate this to above R3trn.

It is estimated South Africa will have to borrow R1.2trn for the deal. “R1trn will be enough to build 100 million RDP houses. Two houses for every man, woman and child in the country,” stated the organisation.

The repayments on a R1.2trn loan come to R100bn a year. This will put a dent in government’s budget to supply basic needs such as education, healthcare, social welfare and public transport.

The Council for Scientific and Industrial Research found that nuclear energy is 25% more expensive than new coal and solar power, and 67% more expensive than wind.

Energy analyst Chris Yelland found that new wind, solar power and gas cost R1 per kW and new coal costs between R1.05 and R1.19 per kW. However, a nuclear will cost between R1.30 and R1.52 per kW.

Fin24 previously reported that the 9.6 GW nuclear energy programme is expected to cost around R650bn over its 10-year lifespan. Earlier this month Energy Minister Tina Joemat-Pettersson announced that requests for proposals (RFPs) would be released on September 30 2016.

Eight nuclear reactors have already been ordered for the nuclear site in Thyspunt, in the Eastern Cape, according to Outa. Fin24 reported that the country currently has one nuclear power station at Koeberg, in Cape Town. Three or four more stations could be built at Koeberg or Jeffrey's Bay in the Eastern Cape.

Organisations Southern African Faith Communities' Environment Institute (Safcei), EarthLife Africa (ELA) Johanesburg and Outa are working together to stop the deal.

On Thursday, ELA and Safcei said they are a step closer in their drawn-out court action to have the nuclear deal set aside with the submission of its replying affidavit.

“The next step is to set a court date,” said Safcei spokesperson Liziwe McDaid.

The two organisations are engaged in legal proceedings against the Department of Energy over agreements signed with Russia’s nuclear firm Rosatom ahead of the official procurement process.

On March 30, the organisations alleged that legal documents in their possession indicate that South Africa did sign a binding nuclear deal with Russia.

They said “the Russian agreement was entered into unlawfully, but makes (an) internationally binding commitment to buy a fleet of nuclear reactors from Russia”.

This article first appeared on Fin24, see here.