Energy Minister David Mahlobo recently called for a "decent debate" about nuclear power. That word must be contextualised to see what it means for delegates. Since whoever wins can likely pass their proposals, the question becomes: should delegates choose Mahlobo's nuclear deal or Deputy President Cyril Ramaphosa's New Deal?
Mahlobo claims the issue is not "cost", since funding need not come from government (for example, the Russians could pay).
The issue is rather "need". That word must be contextualised.
Mahlobo's faction appeals to mostly rural areas, where hubs have been "deindustrialised" by failed industry. Consider Ficksburg, Mbombela, Bethlehem and so on.
Workers migrating to such hubs often found the single reliable resource tob be the public sector. Consequently, the Zuma faction depends upon the politics of patronage. One thus understands:
Mahlobo wants nuclear to make it seem that his "patron" can still assure access to resources in a state of near-bankruptcy.
Can delegates believe the nuclear deal promises? Since we can't discuss cost, let's apply scenario planning.
It uses "total laws", in this case "If all of something is used, no more remains." If actions now use those laws, we can predict the outcome with 100% certainty.To finance an expensive build for us, any country would need guarantees. Since South Africa currently cannot bail out SAA for a few billion, it would likely offer rights to its minerals (valued at around R230-trillion).
So, suppose the Mahlobo (thus, the Nkosazana Dlamini-Zuma) faction wins. The government awards a nuclear contract to, say, Russia. ("Russia" is just an example; we're modelling events within South Africa.)
As expected, the Russians pay for the build. Yet, however much they pay upfront, we need to pay eventually and - by the total law - are unable to. One cannot simply "find" the money any more than a spaza shop owner earning R2000 monthly could "find" enough for a R300,000 delivery truck. Worse, during the build, over 10 years, our debt wouldn't need paying, but would accumulate interest. Thereafter, we will need to pay for the build, interest and electricity. And we still won't have enough money.
Three scenarios are then possible. First, we default on our debt. No money is paid - neither to Russia, nor the BEE entities that expect commission. South Africa becomes bankrupt, and seeks relief from international agencies.
That requires us to restructure our country to meet the debt repayment. Our industry dramatically declines and jobs vanish.
As a second scenario, we ask Russia for help to avoid bankruptcy, and they agree to trigger the minerals guarantees.
For the central BEE partnership (named in the contract), this could be a financial bonanza. It could be arranged in advance that such guarantees also require a BEE component (like the deal last year with Russia, which paid empowerment partners in perpetuity).
The rest of the country, however, gets no benefit.
Instead, since we are in breach of contract, the Russians can bypass our labour laws and their mines will be mechanised and employ little South African labour...