The South African government’s plan to bulldoze through a nuclear energy deal has been dealt what might be a fatal blow by the Cape Town High Court which has declared the plan invalid. It found that the government had not followed due process in making the decision to pursue a nuclear power option, as well as in other critical areas.
The court’s decision has put paid to President Jacob Zuma’s hopes of clinching the nuclear build programme before leaving office in 2019, if he completes his term.
The case was brought to court by Earthlife Africa and the Southern Africa Faith-Communities’ Environmental Institute. The two NGOs were challenging the way in which the state determined the country’s nuclear power needs. The plan would have seen South Africa purchasing 9600 MW of extra nuclear power.
The judge, Lee Bozalek, ruled the government’s action unconstitutional and found that five decisions it had taken were illegal.
These included the government’s decision to go ahead with the nuclear build and the fact that it had handed over the procurement process to the state utility Eskom. The court also ruled that Eskom’s request for information from nuclear vendors, a step taken to prepare the procurement, which ended on 28 April 2017, was invalid.
If it still wants to pursue the nuclear deal, the government will have to start all over again. To do so legally it would have to open up the process to detailed public scrutiny. The country’s electricity regulator would have to have a series of public hearings before endorsing what would be its highest ever spend on infrastructure. Also, any international agreements would have to be scrutinised by parliament.
All this will take time – something Zuma doesn’t have. And it’s unlikely that his successors will be as eager to champion a new deal as he has been. Meanwhile the facts about the deal will become public. This will undoubtedly demonstrate two of the biggest criticisms of the deal to be true: that the country can’t afford it, and that its energy needs have shrunk, making the vast investment redundant.
The court’s ruling has turned the nuclear procurement issue into one of the key markers of South Africa’s political health. It’s not yet clear whether the South African government will appeal the Western Cape High Court’s decision, or comply with the judgment.
A third option is that Zuma simply ignores the courts and continues to pursue the deal.
Demand and affordability
South Africa currently has more than enough electricity to meet its needs. This wasn’t the case about five years ago when widespread outages hit the country. Since then new electricity generation capacity has been added, through the the rapid roll out of renewables, and the opening up of two new giant coal burning plants.
Consumption, particularly by industry, has steadily declined due to faltering economic growth and higher electricity prices. Demand has dropped so much that Eskom plans to close five coal burning power stations.
The argument that the country needs another 9600 MW was identified in documents that the Department of Energy produced in 2011. These are now widely acknowledged as being badly out of date. Recent studies by the University of Cape Town’s Energy Research Centre have shown that the country doesn’t need to consider nuclear for another 20 years.
A number of studies have also shot holes in the government’s argument that the country can afford the proposed nuclear build.
The Council for Scientific and Industrial Research has developed models showing that new nuclear is likely to be much more expensive than coal or renewables. The price ticket for nuclear – which some estimates put at more than R1-trillion – doesn’t take into account the costs of operation, fuel, insurance, emergency planning or the regulation or decontamination at the end of the life of the reactors.
It would also impose a financial burden on the country’s fiscus which it can ill afford particularly now that the economy has been rated at junk status.
So why is Zuma still pushing for the deal to go ahead? One source of pressure might be the Russians. South Africa’s former energy minister, Tina Joemat-Pettersson, had been instructed to signed a deal with the Russian utility, Rosatom to build the reactors. South Africa has also already signed nuclear power cooperation agreements with other countries like the US and South Korea, which the court has declared void.
A more likely reason for Zuma’s zeal is the involvement of the Gupta family with whom he has close ties. The family’s web of interests around the nuclear deal are complex.
What is known is that the Gupta family controls South Africa’s only dedicated uranium mine. The family has developed close relationships with key individuals at Eskom. In November last year the country’s then Public Protector pointed to overlapping directorships between Gupta-owned companies and Eskom.
The report also suggested that Brian Molefe, Eskom’s CEO, had a close relationship with the family. These revelations led to his resignation shortly after the report was published.
Another strand in the complex web is the fact that Zuma’s son Duduzane is a business partner of the Guptas while other relatives are directly employed by them.
Despite his determination, Zuma has become increasingly isolated in his quest for nuclear procurement. The African National Congress is clearly divided on the issue. This is evident from the fact that Zuma has resorted to reshuffling his cabinet to make way for more compliant ministers without reference to party officials as would be the norm.
The private sector has also come out against the idea while the list of civil society organisations opposed to nuclear expansion goes well beyond the environmental lobby and includes a broad spectrum of foundations, faith communities, human rights campaigners and defenders of the country’s constitution.
The nuclear judgment in Cape Town indicates that South Africa’s legal system has not yet been “captured” by private interests.
The key question is whether Zuma and Eskom will accede to the verdict, or whether they challenge it while continuing to ignore the rule of law. Not only would this subvert the country’s constitution and its democratic form of government, it would also deny the constitutional right to popular participation in energy democracy.
The stakes are high – for the country as well as for the president. Will he continue to treat the country’s energy future with impunity? Or will this judgment symbolise the rollback of the democratic dispensation envisaged by the authors of the country’s constitution?
This article was first published by Fin24 and is republished here with permission.
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