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By John Helmer, Moscow

On March 4 the Chinese and South African governments announced they are preparing an agreement on nuclear cooperation to allow the Chinese to sell $50 billion worth of their nuclear reactor technology for South Africa’s power generation programme.

There are four catches. One is that a South African report from the ministry responsible for energy planning recommends against investing in nuclear reactors for at least two, and possibly ten more years. The second catch is that the South African Ministry of Finance has refused to allow any funds to be put into current or future budgets for nuclear reactors. The third catch is that the Chinese have depended to date on reactor technology they have bought from France, the US, and Russia which cannot be resold in the international market. Nuclear reactor bids from each of these three countries have already been tabled for the South African nuclear programme, and until last month the most likely contender for selection, according to South African President Jacob Zuma and Ben Martins, the Minister of Energy, was Rosatom of Russia.

There’s a fourth catch. The reactor design and technology the Chinese are currently developing, which is Chinese-owned and free of rights and resale restrictions, is so new, the design prototype is only in the preliminary approval stage; construction of the first reactor unit will not start until later this year; and no testing of its operational performance has been possible.

What would motivate Minister Martins to reverse his word to Rosatom; ignore the Energy Ministry’s recommendations; overrule the Finance Ministry; and promise to run a nuclear reactor risk the Chinese have yet to accept themselves? The short answer appears to be President Zuma, the official in charge of the National Nuclear Executive Coordinating Committee (NNEECC). In April of 2013, according to a statement from Pretoria, Zuma arranged a reorganization of the government’s nuclear policymaking committee, reducing its membership to himself as chairman, plus the ministers of energy, public enterprises, finance, state security, defence, and international relations.

Then in November Energy Minister Martins announced that the agreement for Rosatom to supply Russian-designed reactors had been negotiated and initialled by both sides. Finalization of the agreement required approvals by other South African ministries, which Martin said would be completed by February 15. Click for the November good news at Rosatom. Click again for February’s bad news for Rosatom. Everyone else on the NNEECC, including Finance Minister Pravin Gordhan, is keeping mum.

Instead of signing with the Russians, and without explaining why, Martins said this week that his nuclear pact with China “includes skills development and capacity building; research and development, the new nuclear build programme, supplier development and localisation, joint marketing, supply of nuclear energy products and infrastructure funding to promote regional nuclear power developments.” In case there was any doubt, Martins said the priority for Pretoria is “capacity building in the nuclear energy sector.”

“Policy certainty and predictability in the energy sector,” Martins announced with his Chinese counterpart, “has contributed significantly to attracting foreign investors to the successful renewable programme and other energy components of the energy mix”.

There are two more catches. Signing the Martins statement for the Chinese government was Tan Rong Yao. With a long career behind him as an electricity regulator, Tan appears to have been promoted before his arrival in South Africa. Still, with the title of “Vice Administrator of the China National Energy Administration”, Tan ranked below Martins. Tan’s agency, the National Energy Administration, is not a ministry. In South African terms, it is closer to the Nuclear Energy Technical Committee which services the NNEECC but is subordinate to it. Tan and his agency lack the authority to make $50 billion nuclear reactor export offers.

The second catch is that since the November 21, 2013, release of the government’s Integrated Resource Plan for Electricity, 2010-2030 (IRP), there has been no policy or predictability at Martins’ level at all. Yesterday his spokesman Robert Nkuma told Business Day of Johannesburg: “The minister has said that at every turn wherever we take decisions, we will inform the public.” When asked to explain why they have refused to sign the Rosatom pact on February 15, Martins would not respond to emailed questions, and Nkuma turned off his mobile telephone.

Overnight they were asked to clarify what Chinese reactor technology their new agreement calls for from Beijing, and what they have done to verify the proprietary rights the Chinese hold to export reactors to South Africa. They refuse to answer.

In Moscow senior officials of Rosatom will not comment on the apparent change of mind on Zuma’s part. Nor will they say what reactor technology the Chinese can legally export. An international nuclear expert says he believes that CAP1400, the Chinese-developed derivative of Westinghouse reactor designs, is too new and untested to be marketable.

So what exactly have the Chinese led Zuma and Martins to believe they can buy? A South African source close to the NNEECC says the only technology the Chinese can offer, and that South Africa can accept, is from Westinghouse. He adds that Westinghouse executives and experts participated alongside the Chinese at their meetings with Martins’ ministry in South Africa ahead of the March 4 announcement. He concludes: “the American government is behind this move, and it is aimed at eliminating both the Russians and the French. The US Government is supporting Westinghouse to agree on the technology transfer and licensing terms with the Chinese, and give the latter a free hand to make their offer attractive to the South Africans.”

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