Misgivings in ANC on nuclear plans

The ANC says the government must rethink its costly and contentious nuclear power expansion programme in light of the country's junk credit ratings.

Leading agencies Fitch and S&P Global downgraded South African sovereign debt to junk status after President Jacob Zuma's cabinet reshuffle and axing of Pravin Gordhan as finance minister.

Plans to expand nuclear power were put at R1-trillion in 2010.

Sunday Times and City Press reports have quoted a confidential document as saying that power utility Eskom will in June invite bids for the building of four nuclear power stations which together would generate 9600MW. The winner is to be named in March.

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But Enoch Godongwana, head of the ANC subcommittee on economic transformation, told reporters that "in the light of the junk status we will have to . revise our expenditure patterns as government.

"If we do nuclear, we must do it at a scope and pace that is affordable. Are we [expecting] a recession? That's a possibility," he said.

New Finance Minister Malusi Gigaba said the funding model had yet to be finalised but the nuclear programme had to be "at a pace and scale the fiscus can afford".

"We [the ANC] don't have full understanding of what the implications [of the downgradings] are at this stage," said Godongwana.

"What we will be making . are preliminary comments on what should be done.

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"A deterioration in South Africa's credit rating will have a major negative impact on our country's ability to fund its development programmes."

Godongwana said the ratings agencies wanted South Africa to manage structural economic change and accelerate sluggish growth.

"The other message from these agencies is that the most recent [cabinet] reshuffle has sent a signal of political instability and policy uncertainty."

Rural Development and Land Reform Minister Gugile Nkwinti said the downgradings had "serious negative implications" for poor people.