Finance Minister Pravin Gordhan has confirmed that the SA power utility, Eskom will stand in as procurement agent for SA’s nuclear power project.
The minister said during his mid-term budget speech on Wednesday that the proposed plan for the new nuclear plan was to provide 9.6 gigawatts of nuclear energy, though government has been argued to be financially incapable of handling the project.
Eskom had last month announced its move to allay public fear over the said funding of SA’s nuclear power project by saying it will have about $11bn, or R150bn, available to cover the costs.
The utility’s executives are also convinced that they can manage the schedule and costs to keep the project within budget.
Though the announcement was made to reassure south Africans that the country would not run out of cash following the projects, only a few citizens believe that with the controversial Gupta family – linked to the Zuma family – circling the lucrative deal and discussions with Russia held in secret, Eskom’s campaigners have the nation’s best interests at heart.
Eskom chief executive officer Brian Molefe at a time told MPs and the media that concerns about whether the country could afford procuring the capacity to add 9,600 megawatt of nuclear energy to the grid were overwrought.
The integrated resource plan, which determines energy needs and how to meet them, was last updated in 2010 and finance minister Gordhan addressed the issue saying the Treasury will be watching the process closely.
“The Treasury will work with Public Enterprises Minister Lynne Brown’s department and Eskom to ensure that the scale and phasing in of the programme are in South Africa’s best interests, and that the procurement arrangements are transparent and compliant with the law,” he said as he stressed that the renewable energy programme was still government policy.
“Contrary to the views of some, these are sound and sensible long-term investments, consistent with our climate-change commitments.”
Eskom is on record as saying renewable energy tariffs paid to independent power producers are too expensive thus its strong support for the SA’s nuclear power project which is assumed to cost $100 billion.
Treasury, on the other hand, says a revised integrated resource plan should decide energy needs, warning that an oversupply and idle capacity could lead to higher electricity prices and hobble the economy.
Meanwhile, the Democratic Alliance argued that allowing Eskom to lead the process would mean it being less open to parliamentary scrutiny, and President Jacob Zuma having greater control over the procurement process.
“Designating Eskom as the procuring agent of the state will fundamentally limit the role and capacity of Parliament to oversee the nuclear deal and, in doing so, increase the potential of corruption surrounding the trillion rand deal,” DA energy spokesman Gordon Mackay said.