Nuclear procurement, which could cost more than R1-trillion, is going full steam ahead, with the Department of Energy once again stating that it intends to introduce 9 600 Megawatts of nuclear energy to the grid in the next decade.
The department yesterday said the funding model for the nuclear build programme will be determined by the response received from bidders.
“The funding model of the project will be determined by the response received from the markets once bidders have responded to the request for procurement,” the department said in a statement. “This will also be done at a pace and scale that the government can afford.”
On Sunday media reports emerged that Eskom – the designated procurer for the programme – would issue a formal RFP from bidders as early as June.
The department responds that the procurement and implementation timelines for the nuclear new build programme are dependent on the finalisation of pre-procurement preparatory work.
In February, Eskom said it had received a positive response to the Request for Information (RFI) it issued in relation to the proposed nuclear build programme. At that time, 27 companies stated their intention to provide a response to the RFI. The companies include major nuclear vendors from China (SNPTC), France (EdF), Russia (Rusatom Overseas) and South Korea (KEPCO).
The RFI was issued on Eskom’s website on 20 December 2016 and asked companies that felt they could provide relevant information to confirm by 10:30am on Tuesday, 31 January 2017 that they would be submitting a response to Eskom (for both Eskom and NECSA use) by 10am on 28 April 2017.
Media reports indicated that a RFP would be make in June, with the winning bidder announced in March 2018 and the contract concluded between December 2018 and March 2019.
The DA has raised red flags, however, pointing to one of the stated reasons that Fitch gave for South Africa’s sovereign downgrade. The Fitch report reads: “Eskom, has already issued a request for information for nuclear suppliers and is expected to issue a request for proposals for nuclear power stations later this year. The treasury under its previous leadership had said that Eskom could not absorb the nuclear programme with its current approved guarantees, so the treasury will likely have to substantially increase guarantees to Eskom.”
The DA believes South Africa cannot afford, and does not need, the nuclear deal. “Indeed, international ratings agencies agree and this deal has been repeatedly cited as a cause for great concern and a key factor in downgrades not only for Eskom, but the country as a whole,” the party states.