Vast nuclear building programme could tip SA off financial cliff

18 December 2014 - 02:03 By The Times Editorial
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Pretoria is pushing ahead with its plans for the large-scale development of nuclear energy, confirming that it has signed preliminary agreements with Russia, France, China, the US and South Korea as a precursor to the ''procurement process".

The envisaged procurement of 9600MW of atomic power - double the eventual output of the long-delayed Medupi coal-fired power station - will give comfort to proponents of nuclear energy who argue that it is safe, clean and an ideal solution to our debilitating power constraints. Moreover, the building of the eight nuclear reactors will not have to be paid for by Eskom, which is mired in a R255-billion funding black hole.

Critics insist that nuclear power is not safe, pointing to disasters such as those at Chernobyl and Fukushima, as well as to the long-term health and environmental hazards posed by nuclear waste.

But it is the affordability issue that is likely to gain the most traction. Russia, which appears to be in pole position to clinch the lion's share of the deal, said it would be worth about R550-billion.

But cost overruns are likely to inflate that figure to well over R1-trillion - more than the total annual tax take of SARS.

This is a really big ask for a mid-level developing economy that is facing the possibility of further ratings downgradings to junk status, a worryingly high level of government debt and slowing economic growth.

Just where is the money for the nuclear building programme going to come from given that economic growth this year is expected to be under 2%, and 2.5% next year provided there is no large-scale labour unrest?

Instead of rushing to seal a massive nuclear deal, the government would have done better to follow the advice of its own National Planning Commission and hold off for a while.

There's another, more pressing issue: the country will not benefit from the additional power supplied to the national grid by the planned nuclear reactors for a decade or so.

How will we keep the lights on in the interim?

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