Gwede nukes Necsa's failing board

19 January 2020 - 00:00 By JEFF WICKS



As SA's state-owned nuclear authority faces financial collapse, energy minister Gwede Mantashe has lambasted its board. He accused the directors of going over his head to President Cyril Ramaphosa.Mantashe accused the board of the Nuclear Energy Corporation of SA (Necsa) of talking to him "like a small boy", Business Times can reveal. The board has since resigned en masse.Mantashe's tirade came after the directors reported that the company was broke and, with a projected shortfall of R325m by March, would not be able to pay R60m in salaries to its 1,500 staff.Behind the drama lies a tale of neglect and mismanagement of a nuclear facility once considered a global player because of NTP Radioisotopes, which uses the Pelindaba reactor to produce nuclear medicine used in cancer treatment in a business that was once valued at nearly R800m a year.NTP was Necsa's money-spinner but shut down production for several months in 2018 after a deviation from safety procedures. Experts warned of disastrous consequences if workers in control of the nuclear reactor and tons of radioactive waste went on strike. Mantashe's chiding came during a meeting with Necsa senior managers on Monday. He told them the board had run to Ramaphosa to say Necsa was in crisis because the money had run out. In the meeting, he is understood to have said he would resist efforts by the board to use ring-fenced funds to keep the company afloat. He said the board had thrown him under the bus with Ramaphosa and had issued him with an ultimatum to act. The four board members, Pulane Kingston, Pulane Molokwane, Matlhodi Ngwenya and Bishen Singh, resigned the next day. Natie Shabangu, on behalf of Mantashe, would not comment on the minister's "emotional state" and reiterated his stance that a new board was on the cusp of being finalised. He would also not comment on Necsa's financial state. In a resignation letter that directors sent to Mantashe (and which Business Times has seen), the directors not only told him that Necsa was in crisis, but also drew back the veil on their fractured relationship with the minister. "It is unfortunate that we have consistently lacked your support . an example of which includes your public utterances that there is no board while continuing to interact with us." The directors approached the presidency in December, when they allege the state enterprise did not have enough money to pay Christmas salaries. A director, who spoke on condition of anonymity, said it was an exercise in desperation after Mantashe had ignored the board's pleas for aid."It was a crisis and we had to do something," the director said.The board wanted Mantashe to approve Necsa using ring-fenced funds for decommissioning and decontamination, a move employed by the board since 2016 to bridge the money gap.Necsa eventually put on hold projects and stayed creditors to raise the money, said the resignation letter.Necsa - tasked with research in nuclear energy and the processing and storage of nuclear material - is funded by a R550m annual state grant, the lion's share of which is used to pay salaries. The company has incurred losses totalling R554m since 2014, according to the board.A former director, who resigned last year and who spoke on condition of anonymity, said the lack of direction from the government had led to the resignations."Necsa is a company going nowhere and the state has no strategy for what they should do and what they want out of it," he said.In a letter sent to Mantashe on January 9, the dire financial position of Necsa was set out and the "absence of direction from the department and minister over a period of months" was noted. The directors gave Mantashe a deadline of January 13 to intervene."Maybe now that the board has resigned he will approve the use of the ring-fenced funds . it's the only option," the board member said. David Fig, a political economist with a focus on energy, said Necsa's survival required urgent restructuring and reform.He said the company had become dysfunctional and bankrupt, and that return on investment was lacklustre considering the "enormous" amount of money spent by the state. But Fig warned that repurposing the entity for a focus on beneficial technology - including renewable energy - would not be without its pitfalls."The Pelindaba campus has become tantamount to a dump for nuclear waste, with more than 40 sites in the compound devoted to nuclear waste storage," he said."It's not the kind of corporation you can abandon. There is a nuclear reactor at Pelindaba, and they can scale back its operation and put it on a skeleton staff," he said, but warning that the move might compromise critical safety procedures."The state has a duty to protect the public from the radioactive waste and the stability of the reactor," he said.

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