nuclear
Viktor Polikarpov. Pic credit Puxley Makgatho
Victor Polikarpov noted that the government would not declare its financial plans until they announced the winning bid. Pic credit: Puxley Makgatho

In response to South Africa’s briefing earlier this week, Viktor Polikarpov, Rosatom’s regional vice president said that critics of government’s plan to build eight nuclear reactors worth up to $100 billion should “stop worrying”, reported AFP on Wednesday.

A row erupted in September last year when Rosatom appeared to announce that it had won the nuclear power contract, prompting allegations that the South African government had not abided by procurement rules.

However government insisted at the time that the Russian deal simply initiated the procurement phase of the project and that other countries would be given a chance to bid.

Nuclear controversy

Five nations – Russia, France, China, the United States and South Korea – are competing for the nuclear contract, but there is widespread speculation that President Jacob Zuma’s close relationship with Russian President Vladimir Putin has sealed the deal for Rosatom.

“This is not true, these are insinuations and rumours”, Polikarpov said in an interview with AFP.

“I don’t know where they come from — maybe we were the first to sign an inter-government agreement and it was rather comprehensive compared to similar agreements signed by other countries.”

Possible nuclear deal corruption

There is a fear of possible corruption in the massive upgrade deal is fuelled by accusations of kickbacks involving Zuma and other government officials in a multi-billion-dollar arms deal in 1999.

Polikarpov acknowledged this but said the South African government was taking pains to ensure the procurement process was clean.

“I think that measures taken by the government are directed towards avoiding a similar case with the arms deal.

“They are doing their best — to comply with the constitution, to make it cost effective, to make it transparent. There will be an international auditing company hired to monitor the assessment of the deal,” he told AFP.

The cost of nuclear

Cost estimates for as many as eight reactors generating 9,600MW, which the government wants to begin operating from 2023 and complete by 2029, range from $37 billion to $100 billion, Bloomberg News has reported.

Critics of the nuclear plan have expressed concern that the cost of the build could financially cripple a country facing sluggish growth and unemployment running at an official 25%.

Polikarpov would not put a price Rosatom’s nuclear build bid, but said Russia was offering three possible financing deals.

“One option is the project can be financed 100% by the ‘engineer and procurement contract’, like we are doing with Iran, like we did with China.

“Those countries were capable of financing the project themselves, which is obviously not the case with South Africa.”

A second option was the “build, own, operate principle”, where a state loan could be granted by the Russian government with a grace period and “attractive interest conditions”.

The third model involved investment by private companies in partnership with Rosatom.

He said Rosatom had been approached by investors who saw nuclear power plants as “becoming cash cows for the future”.

But, he noted, the government would not declare its financial plans until they announced the winning bid.

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