Ramokgopa and Mantashe should withdraw the irregular notice for new nuclear power procurement

29 January 2024

The Minister of Electricity, Kgosientsho Ramokgopa and the Minister of Mineral Resources and Energy, Gwede Mantashe, should immediately withdraw the irregular determination notice issued on Friday in which they announced the commencement of a process to procure new nuclear energy generation capacity of 2500MW based on the 2019 Integrated Resource Plan (IRP).

The DA holds the view that the new determination notice issued by Ramakgopa and Mantashe undermines Treasury authority on fiscal sustainability, violates the conditions for Eskom’s debt assumption and has not been properly costed. Additionally, we question how Mantashe signed the determination in 2020 and the Chairperson of NERSA at the time, Jacob Modise, in 2021, when the suspensive conditions issued by NERSA in terms of the proposed procurement had not been adhered to.

South Africa’s fiscal position has become progressively worse since October 2019 when the IRP 2019 – which detailed the ANC government’s intention to procure 2500MW of new nuclear power, was released. As such, the new determination notice is proposing the commencement of a project that is financially impossible and is on a scale and pace that the country cannot afford. No information has been provided by the Department addressing the “pace and scale” imperative of IRP 2019, nor have they provided any long-term demand profile as required by NERSA.

The fact that this determination was issued without comprehensive cost estimates confirms the undeniable reality that it was a unilateral decision taken by Mantashe and Ramokgopa without consulting Treasury.

In their rush to go out to tender for a new nuclear build programme, Ramokgopa and Mantashe may be in direct violation of the conditions that were attached to Eskom’s debt assumption by national Treasury. Eskom’s debt assumption obligations are such that it is not allowed to take on more debt and engage in any new capital development projects. However the new determination notice, places Eskom and the Department of Mineral Resources and Energy and Eskom at the center of the proposed nuclear power procurement programme.

What is more worrying is that Mantashe has decided that he will not be accountable to anyone in his dodged determination to procure new nuclear power. Mantashe is yet to respond to a DA Promotion of Access to Information Act (PAIA) submitted on 12 December 2023 to obtain the record of decision detailing his Department’s decision to procure 2500MW of new nuclear capacity. It is this cloud of secrecy and lack of accountability that has South Africans worried that a new nuclear build programme may become a feeding trough for connected cadres at a scale that would dwarf the exponential cost escalations at the struggling Kusile and Medupi power stations.

Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy