Eskom in their recent road show to Jeffreys Bay, insisted that nuclear energy is safe and that the residents of the region have nothing to fear from having a nuclear power station on their doorstep.
However, all property insurance excludes the risk of loss of value due to a nuclear incident or contamination by radioactivity. A quick look at any householders insurance policy will confirm this.
This is due to the huge financial implications to insurance companies should a nuclear accident occur. Eskom cannot say that nuclear is safe. This is what Tepco told the people of Japan and radiation is now even being found in the sewage treatment works in that devastated country.
How would a nuclear accident affect property prices in Jeffreys Bay?
If there is some incident, such as a large leak of radiation, it is likely that many people will either be forced to evacuate their home, or choose to move out of the area due to the increased risk of cancer, particularly amongst women and children. This will have a predictable effect on property values. For serious accidents, property close to Thyspunt would become unsellable, as no- one would would be allowed to move into an uninhabitable area.
For property further away, or in the case of a less major incident, the value is likely to drop significantly. In the case of guest houses, restaurants and other places reliant on tourism, it is likely that few tourists will want to visit a radioactive region. This means revenue will drop, and the businesses would not longer be viable.
In these cases, the owner has recourse by suing the operator of the nuclear plant, in this case Eskom. However, in terms of the National Nuclear Regulator Act of 1999, there is a limit on the liability of Eskom, which at the moment stands at about R3 billion.
Once one considers that the cost of clean up of radioactive contamination, compensation for health effects, etc. then it is questionable if there will be anything left for the less crucial property value compensation.
The cost of clean up in Japan is fast approaching R 100 billion and will likely far exceed this figure in time to come.
We cannot be naive and say it cannot happen to us.