UPDATED WITH COMMENT: South Africa in ‘$50 bn deal’ for Russian nuclear reactors

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http://www.biznews.com/briefs/2014/09/south-africa-50-bn-deal-russian-nuclear-reactors/

UPDATED WITH COMMENT: South Africa in ‘$50 bn deal’ for Russian nuclear reactors

Posted on September 23, 2014 in Briefs

This article below from AFP is so disturbing one hardly knows where to begin. Nuclear power stations are prohibitively expensive and affordable only by the richest nations. They are also potentially dangerous, as the well documented Chernobyl, Fukushima and Three Mile Island disasters attest. Plus, mankind has yet to find a safe way of dealing with nuclear waste. With innovation making renewables cheaper, nuclear is also so 20th Century. Such is the public aversion that those who commit their nations to nuclear programmes are often accused of receiving inappropriate inducements – a justifiable conclusion given nuclear’s smelly reputation. In South Africa’s case, we come from a base of well founded suspicion about politicians with snouts deep in the public purse. Trust in an already opaque process hasn’t been helped by the spotty track record of the recently appointed Energy Minister. And with an abundance of coal, potentially game-changing shale gas deposits in the Karoo, plentiful and cheap natural gas in Mozambique and a successful and expandable renewables programme, you have to wonder what is motivating those even considering nuclear as an option. A generous interpretation is that SA’s Government may have fallen into what Berkshire Hathaway’s chairman Warren Buffett describes as “the institutional imperative”, a malaise that often afflicts large organisations. As he explained when writing to shareholders in 1989: “When I entered the business world, I thought then that decent, intelligent and experienced managers would automatically make rational business decisions. But I learned over time that isn’t so. Instead, rationality frequently wilts when the institutional imperative comes into play. Institutional dynamics, not venality or stupidity, set businesses on courses which are too often misguided.” Not just businesses, but pretty much any large organisation. Governments included. – AH

From Agence France-Presse

Russia’s atomic energy agency said Monday it will provide up to eight nuclear reactors to South Africa by 2023 in a $50 billion strategic partnership between the two countries.

The delivery of the reactors will enable the foundation of the first nuclear power plant based on Russian technology on the African continent, the Rosatom agency said in a statement.

Director general Sergey Kirienko estimated the value of the deal at between $40 to $50 billion, given that one reactor costs around $5 billion, according to the Itar-Tass news agency.

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1. South Africa is case study in cuckoo economics: Bruggemans

http://www.biznews.com/opinion/cees-bruggemans/2014/09/cuckoo-nesting/

South Africa is case study in cuckoo economics: Bruggemans

Posted on September 24, 2014

Cuckoo economics is a term that’s just been invented by South African economist Cees Bruggemans. It’s very catchy, but let’s hope it doesn’t go viral because it’s not a particularly flattering way to describe how the domestic economy is developing. Cees calls South Africa’s decision to get into bed with Russia on nuclear power sourcing “cuckoo economics”. Recent decisions by the South African Reserve Bank point to it also embracing cuckoo economics. In a nutshell, cuckoo economics is this: enjoying short-term fun stuff and expecting others to do the hard work for the long term. – JC

By Cees Bruggemans *

Cuckoos are remarkable birds. They have all the fun, without the downside. They perpetuate the breed without having to invest in a lifetime of costly parenting, instead co-opting unsuspecting foster parents to do the job (often at the cost of their own offspring being pushed out of the nest, made to walk the plank).

What this has got to do with the economy?

We appear to be heading for cuckoo economics in our nuclear power sourcing. Decide in haste and repent at leisure. Except those doing the hasty contracting, or at least setting the tendering ball rolling, seem to be having all the fun, while the next three generations of South Africans will be paying expensively for so much present day fun of a relative few.

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2. Russia nuclear deal 'scares' critics

http://www.iol.co.za/business/markets/south-africa/russia-nuclear-deal-scares-critics-1.1754798

Russia nuclear deal ‘scares’ critics
September 23 2014 at 07:45am
By Banele Ginindza and Dineo Faku

Johannesburg - South Africa has potentially set itself on a collision course with the West by announcing yesterday that it had signed a nuclear partnership agreement with Russia.

The deal with Russia’s state-owned nuclear company may see Rosatom build reactors in Africa’s second-biggest economy, a development that critics of the government’s nuclear energy plan fear would put a massive financial strain on the country and hike power prices.

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But the awarding of the contract to Russia, a fellow member of the Brics (Brazil, Russia, India, China and South Africa) bloc of emerging powers, is poised to raise eyebrows as Russia is currently the target of sanctions over the conflict in eastern Ukraine. Analysts say it is unclear how South Africa will navigate the sanctions minefield.

“It is a scary development,” a market analyst, who declined to be identified, said of the nuclear agreement.

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Lance Greyling, the DA’s spokesman on energy, said Joemat-Pettersson must immediately release details on the deal with Rosatom.

“We have serious concerns about this agreement,” he said in a statement. “Last year, an unsigned draft agreement sought to give Russia exclusive rights for the construction of nuclear plants in South Africa by committing the government to securing consent from Russia should South Africa wish to enter into any other agreements with third-country organisations or countries.”

Greyling added that “this deal may also undermine South Africa’s bilateral commitments on nuclear energy with other nations and would indeed act against South Africa’s national interest, limiting our ability to effectively negotiate and procure nuclear capacity from other nations”.

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Earthlife Africa project co-ordinator Christian Taylor said that in the long term, the cost of nuclear electricity produced under the programme would be too expensive for ordinary people to afford. He added that South Africa was giving itself over to long-term debt with Russia.

“We must be concerned. This would be more expensive than any other alternatives. This would definitely alter the tariff price,” Taylor said.

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3. South Africa says no Russian nuclear reactor deal, yet

http://news.yahoo.com/south-africa-50m-deal-russian-nuclear-reactors-172400718.html

South Africa says no Russian nuclear reactor deal, yet
AFP
20 hours ago

Johannesburg (AFP) - South Africa's government on Tuesday said it had not yet awarded Russia a deal worth as much as $50 billion to develop eight nuclear reactors, saying the countries had merely signed a cooperation agreement.

Russia's atomic energy agency on Monday announced that it had won a lucrative contract to develop nuclear power in South Africa, prompting allegations that President Jacob Zuma's government had dodged procurement rules.

Pretoria's energy ministry insisted Tuesday that the Russia deal "initiates" the "procurement" phase of the project and that other countries would be given a chance to bid.

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Following the Russian announcement, South Africa's opposition Democratic Alliance called for parliament to investigate.

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