This is the deal that could break the Budget.
The effort by President Jacob Zuma and his allies in Cabinet and at Eskom to push through a plan to procure 9,600 MW of nuclear power is frightening for its potential to deliver a financial meltdown.
Some estimates suggest such a deal could end up costing more than R1 trillion — roughly the same ballpark as the South African government’s entire annual expenditure.
A nuclear deal would tie us into repayments for at least 25 years — and into the same technology for 50 years.
This comes at a time when there is an explosion of innovation and development in renewable energy, where costs are falling every year.
By contrast, nuclear power plants are historically among the worst mega-projects for cost and time overruns — meaning we risk unsustainable debt or electricity tariffs.
And the potential fiscal bloodbath will only attract the great whites of the corruption game. By the time the payment is due, they’ll have eaten their fill and be long gone.
The government’s own studies also say there is no need to rush to make a decision, given that demand is low and new coal plants are still to come on line.
- The largest procurement in SA to date is in the hands of the High Court in Cape Town
- Looking for Mr Nuclear
- 9 things you need to know about the nuclear deal
Yet, as our stories demonstrate, there is unseemly political pressure to get procurement underway.
What’s behind it?
Have political pay-offs already been made?
How come the Russians are always in the picture?
We don’t have all the answers yet, but the nuclear hazard signs are flashing.