National Treasury’s work on nuclear energy is being kept secret

27 September 2015

The Minister of Finance, Nhlanhla Nene, has not disclosed the fact that the National Treasury conducted and completed extensive work on the proposed nuclear build programme in the 2014/15 Financial Year.

Up until now the Minister has claimed the National Treasury had only recently been invited into the process of decision-making on the financing of the nuclear build programme; and that, although work was being done on the nuclear build programme, the work had not been completed.

However, a careful reading of the National Treasury’s 2014/15 annual report tells a very different story. The National Treasury in fact: 

- conducted and completed extensive work on nuclear energy during the 2014/15 Financial Year;  

- some of the work was included in the decision-making process and submitted to the Department of Energy during the 2014/15 Financial Year; and 

- an official, or officials, from the National Treasury, received training, at an estimated cost of R500 000, in nuclear finance, which was sponsored by South Korea.

National Treasury’s Urban Development and Infrastructure Unit, according to National Treasury’s 2014/15 annual report: 

“completed the update of the liquid fuels sector investment study and several studies on the feasibility of gas, nuclear and regional hydro for electricity generation.” (National Treasury, National Treasury 2014/15 Annual Report, p. 64.)

The Unit evidently completed a study, or several studies, on the feasibility of inter alianuclear energy for electricity generation in South Africa.

Moreover, the National Treasury’s Urban Development and Infrastructure Unit’s study, or studies, on the feasibility of inter alia nuclear energy were completed before the end of the 2014/15 Financial Year.

National Treasury’s Oversight and Governance of State-Owned Enterprises Unit, according to National Treasury’s 2014/15 annual report: 

“Finalized the report on financing nuclear options, models and solutions and presented to the Nuclear Sub-Work Group on corporate finance and procurement; compiled a memorandum and letter formally submitting the report to the Department of Energy (DOE).” (National Treasury, National Treasury 2014/15 Annual Report, p. 96.)

The Unit evidently completed a report on financing nuclear energy.

Moreover, National Treasury’s Oversight and Governance of State-Owned Enterprises Unit’sreport on financing nuclear energy was completed before the end of the 2014/15 Financial Year.

National Treasury’s Oversight and Governance of State-Owned Enterprises Unit also presented the report on financing nuclear energy to a Nuclear Sub-Work Group on Corporate Finance and Procurement.

It is not clear from the National Treasury’s 2014/15 annual report whether the Nuclear Sub-Work Group on Corporate Finance and Procurement was located inside or outside the National Treasury.

However, the Unit formally submitted a letter, memorandum and report on financing nuclear options to the Department of Energy.

Moreover, National Treasury’s Oversight and Governance of State-Owned Enterprises Unitsubmitted the letter, memorandum and report on financing nuclear energy to the Department of Energy before the end of the 2014/15 Financial Year.

A National Treasury official, or officials, according to the National Treasury’s 2014/15 annual report, evidently received training in nuclear finance during the 2014/15 Financial Year in South Korea. (National Treasury, National Treasury 2014/15 Annual Report, Annexure 1H, p. 408.)

Moreover, National Treasury’s National Capital Projects Unit, according to the National Treasury’s 2014/15 annual report, also completed “several in-depth studies on short and long-term energy generation options for South Africa.” (National Treasury, National Treasury 2014/15 Annual Report, p. 65)

Although there is no explicit mention of nuclear energy, the National Capital Projects Unit’sin depth studies almost certainly include nuclear energy as a possible energy generation option for South Africa.

In the end, National Treasury:  

- have clearly done more work on the feasibility, financing and assessment of alternative energy options, including nuclear energy, than the Minister has been prepared to disclose; and 

- much of the work was completed before the end of the 2014/15 Financial Year.

The Minister is walking a political tightrope because the National Treasury has more than likely raised serious questions about the feasibility of the nuclear build programme. 

If this is the case, the Minister is on a potential collision course with President Jacob Zuma who wants the nuclear build programme procurement concluded before the end of the 2015/16 Financial Year.

In the end, it’s not in the public interest for the work done by the National Treasury on the nuclear build programme to be hidden from the public or Parliament.

I will, therefore, request the Chairperson of the Standing Committee on Finance, Yunus Carrim, to schedule a briefing by the National Treasury on: 

- the work conducted and completed on the nuclear build programme by the National Treasury; and

- the economic and financial implications of the proposed nuclear build programme for South Africa.

We cannot sit back and allow the nuclear build programme to go ahead in secret given the massive financial implications for South Africa.

Statement issued by David Maynier MP, DA Shadow Minister of Finance, 27 September 2015