Nuclear energy programme would be economic suicide

President Jacob Zuma's remark that the government expected to ''conclude the procurement of 9600MW of nuclear energy'' seemed to be tossed into his recent State of the Nation address as an afterthought. And it nearly went unnoticed.

But energy analysts were stunned. The president's statement contradicted the Department of Energy's revised draft of the Integrated Resource Plan released late last year.

The revised plan - prompted by misgivings by the Treasury and the National Planning Commission about the costs of a major nuclear building programme - suggested that less nuclear power would be needed if the demand for electricity was lower than projected because of slowing economic growth, or if the atomic programme proved too expensive.

The subsequent collapse of the rand and other emerging-market currencies appears to have justified those concerns.

A nuclear programme of the order of 9600MW will cost hundreds of billions of rands - some analysts reckon a trillion might be a more realistic figure given the likelihood of massive cost overruns.

This would dwarf the controversial arms deal concluded in 1999 at an initial cost of R41-billion.

Financing a large-scale atomic build programme would be a Herculean task given that the rand is unlikely to recover any time soon. As interest rates rise in developed economies, the cost of borrowing the money would be prohibitive for a mid-sized economy such as ours. Finance Minister Pravin Gordhan's commitment to reining in the budget deficit would ultimately be blown out the water.

High-level talks between South African officials and nuclear operators in Russia, France and elsewhere are said to be at an advanced stage and an announcement on the nuclear build programme is expected shortly. It would make no sense financially to opt for such a massive programme now.

If Zuma's administration does decide to plunge in regardless, it would do well to ensure that the entire process is transparent. We simply cannot afford another arms deal scandal.