The reason Gordhan won’t approve nuclear | Infrastructure news

nuclear-power-plant-70893_640The burning question at the centre of South Africa’s new nuclear expansion programme remains whether the country will be able to afford it.

While President Jacob Zuma has said that the country would undertake the project provided the country could afford the scale and scope of the project, National Treasury has been is not entirely satisfied by documents that were supplied by the energy department.

Treasury indicated that the documents showed no conclusive figures yet to support claims that South Africa could afford the programme or show the social impacts of new nuclear plants in the country.

On Friday, Finance Minister Pravin Gordhan said that the energy department had undertaken a feasibility study to determine the cost of nuclear power.

However, Gordhan felt that the information from studies released by the department was limited and that more research was required.

He also said that the information contradicted general deputy director of energy, Zizamele Mbambo’s view that only an approach to the markets to fund the programme would suffice.

Gordhan said “extensive work” was still required before substantive conclusions could be reached.

“A full cost-benefit analysis must be conducted which must include a comprehensive social and economic impact assessment before the feasibility, affordability and procurement strategy can be properly assessed by the Treasury,” Gordhan said.

Treasury is not however satisfied with the documents which it received from the department, and responded in a letter to the department that outlined its assessment of “the state of readiness of the procurement strategy”.

Treasury said it would communicate with the department and requested additional documentation.

It was previously suggested by energy minster Tina Joematt-Petterson that Eskom fund the new nuclear programme itself, however last week director-general of finance, Lungisa Fuzile, told Business Day that Eskom’s current government guarantees amounting to R350 billion may not be used to fund nuclear reactors.

Gordhan has also said that for now, he remains firm on his decision to not approve the new nuclear programme if the country cannot afford it.

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