Nuclear deal will guarantee more downgrades: DA

It is an undeniable fact that South Africa cannot afford, and does not need, government’s planned nuclear energy deal, the Democratic Alliance said on Sunday.

Media reports on Sunday that the nuclear deal was going full-steam ahead were extremely concerning and would essentially guarantee that South Africa would be downgraded by more ratings agencies and make recovering from this status even more difficult, DA Spokeswoman Natasha Mazzone said.

Fitch Ratings stated in no uncertain terms that a key driver behind the decision to downgrade South Africa’s long-term foreign currency debt and long-term local currency debt to “BB+”, or “junk status”, was that “Eskom has already issued a request for information for nuclear suppliers and is expected to issue a request for proposals for nuclear power stations later in 2017.”

The Treasury under its previous leadership had said that Eskom could not absorb the nuclear programme with its current approved guarantees, so the Treasury will likely have to substantially increase guarantees to Eskom.

“The undeniable fact is that South Africa cannot afford, and does not need, the nuclear deal.

Indeed, international ratings agencies agree and this deal has been repeatedly cited as a cause for great concern and a key factor in downgrades not only for Eskom, but the country as a whole.”

“These downgrades have already and will continue to have a devastating effect on our economy. Jobs will be lost and the cost of living will increase, which will hurt the poor,”Mazzone said.

Earlier on Sunday, local newspapers reported that a confidential document reveals that South Africa’s nuclear-build programme kicks off in earnest in June when Eskom will issue a formal request for proposals from companies bidding for the estimated R 1 trillion contracts.

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The nuclear deal – for which Russian company Rosatom was widely considered to be the front runner, was, according to senior National Treasury officials, “directly related” to President Jacob Zuma’s axing of Finance Minister Pravin Gordhan and his Deputy Mcebisi Jonas, the newspaper reported.

“It is well known that Gordhan was against the project as he said the country couldn’t afford it. Eskom will be issuing a request for proposals in June and that really is the beginning of procurement.

Gordhan had to go because he was going to block it again,” a senior official reportedly said.

The internal Eskom document dated three days before Gordhan and Jonas were axed revealed a tight timeline for the programme that would see four plants built to provide 9600 megawatts of electricity to the country.

Thyspunt is the preferred site for the first of the nuclear reactors, despite fierce resistance from local residents who are against a nuclear power station being built near to St Francis Bay and Jeffreys Bay.

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