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CAPE TOWN — Reading between the lines, it would seem that the Zuptoid quickstep with the Russians in SA’s now-abandoned, financially suicidal nuclear station dance involved some re-scripting of management choreography at the National Nuclear Energy Corporation (Necsa). According to respected nuclear sector observer, Chris Yelland, the Necsa board is somewhat at sea, in financial trouble and in possible danger of removal by energy minister, Jeff Radebe. A change of ruling party elite will do that to you, especially when those departing did little by the book and the newcomers insist on ethical rules and proper governance. The problem includes prior engagement with Rosatom (the Russian Atomic Energy body), and some complicated knots Necsa tied itself up in regarding its satellite research and medical nuclear radioisotope body oversight. The latter was twice shut down by the national nuclear regulator because of safety lapses, costing the fiscus in lucrative international sales of a commercial medical nuclear radioisotope. From being one of the globe’s biggest suppliers, South Africa faded on the radar. The board claims to have reformed significantly, citing its clean books in the last financial year and boasting that it actually paid tax on profits. If that’s true, it makes for a nice change. – Chris Bateman
By Chris Yelland*
Independent reports are being received by EE Publishers that energy minister Jeff Radebe has requested the Necsa board to provide reasons why it should not be removed, and that issues relating the Necsa chairman are central to this matter.
It appears that the issues raised by the minister with the board concern matters of governance, engagements with Russian nuclear interests and possible unauthorised research reactor deals with Russia’s Rusatom, overseas trips by the Necsa chairman, unauthorised media releases, articles and/or communications, and apparent conflicts of interest.
Formal questions have been put to Minister Radebe, to Necsa chairman Dr Kelvin Kemm and to Necsa CEO Phumzile Tshelane, including a request for confirmation as to whether the reports being received are correct or not, and/or whether there is any substance to these reports, to which Necsa has replied:
“The Necsa board and the minister of energy are engaged in discussions relating to the proper governance of the corporation. These engagements constitute the normal board and shareholder engagements and cannot be, at this stage, carried out in newspapers. Necsa expects that the outcomes may be communicated by the minister and/or the Necsa board at some stage.”
Necsa further indicated that as the Necsa board is appointed by the minister of energy, it would be more appropriate for EE Publishers to approach the minister for further information, and not Necsa. At the time of publishing this article, no reply had been received to the questions put to the minister of energy, although confirmation was received that the minister had received the questions.
Necsa is the Nuclear Energy Corporation of South Africa, a state-owned enterprise undertaking R&D and commercial activities in the field of nuclear energy and radiation sciences, and the production of medical nuclear radioisotopes and associated services. Necsa is also responsible for processing source material, including uranium enrichment, and co-operating with other institutions, locally and abroad, on nuclear and related matters.
Apart from its main activities at Pelindaba, near Pretoria in South Africa, which include operation and utilisation of the SAFARI-1 research reactor, Necsa also manages and operates the Vaalputs National Radioactive Waste Disposal Facility in the Northern Cape on behalf of the National Radioactive Waste Disposal Institute (NRWDI).
Over the last few years, Necsa has been embroiled in a number of debilitating operational, financial and governance challenges.
As a result of safety procedure lapses, Necsa’s NTP Radioisotopes plant, which produced a significant share of the world’s commercial medical nuclear radioisotope, Molybdenum-99, was shut down by South Africa’s National Nuclear Regulator (NNR) in November 2017, which lasted almost a full year.
Several attempts to restart the NTP plant were undertaken during the leadership of Mr Thabo Tselane, a Necsa appointed NTP board member, who according to media reports, took over as interim group MD from Tina Eboka, when she and four NTP executives were suspended. Up until July 2018, these attempts by Tselane appear to have failed.
Since July, when the senior executives, including, Eboka, were reinstated after a nearly 7 month period of suspension, the process of rectifying shortcomings and bringing the operating and safety procedures in line with the requirements of the NNR seemed to have been marred by what appeared to be conflict between the boards and management of NTP Radioisotopes and its parent company, Necsa.
The problem was finally resolved after energy minister Jeff Radebe appointed deputy energy minister Thembisile Majola to assume full oversight of the board of NTP Radioisotopes from Necsa, which enabled more efficient communication between NTP, Necsa and the NNR.
It was announced in mid-November that the NTP Radioisotopes plant was back in operation after conditional approval to restart was given by South Africa’s National Nuclear Regulator (NNR).
NTP Radioisotopes normally has a revenue of about R1.3bn a year, providing a contribution of more than 50% to the revenue of the Necsa group. The closure of the NTP production plant for a year has therefore obviously had a devastating financial impact.
There are also wider concerns regarding the financial health of Necsa. The Auditor General (AG) has raised ongoing concerns about inadequate financial provisions by Necsa for decommissioning and dismantling (D & D) costs at the end-of-life of Necsa’s SAFARI-1 research reactor.
As a result, Necsa’s annual financial statements for the year ending 31 March 2018, which were due to be published by end September 2018, have still not been tabled.
Note: This article will be updated as further information comes to hand, and/or a response from energy minister Jeff Radebe is received.
- “South African nuclear radio-isotope production facility back in business, but…” – by Mike Rycroft, EE Publishers, 20 November 2018.
- “State-owned nuclear medicine maker reopens after crippling shutdown” – by Karyn Maughan, Sunday Times, 26 November 2018.
- “Another nuclear safety scare at Pelindaba as management fumbles” – by Micah Reddy, amaBhungane, 20 June 2018.
- “Is a nuclear success story about to be snuffed out?” – by Micah Reddy, Amabhungane, 5 February 2018
- “Exclusive: Looking for Mr. Nuclear” – by Micah Reddy and Ferial Haffajee, amaBhungane, 28 February 2017.
- “Nuclear storm brews as board tries to oust energy chief” – by Lionel Faull, amaBhungane, 24 July 2015.
- Chris Yelland, investigative editor, EE Publishers.
Response from Necsa chairman Dr Kelvin Kemm shortly after the article was published
During 2017 Necsa detected some faults in the management of its wholly-owned subsidiary NTP which produces nuclear medicine for the international market. The CEO of Necsa took steps to correct this and to introduce a general management streamlining which has now resulted in a much more effective operation.
As part of general business expansion Necsa linked up with a new Russian health company Rusatom. A strategic document of intent was signed between Rusatom and Necsa at the BRICS conference in Sandton in July. Part of the intent is to build two specialist nuclear reactors at Necsa, designed for nuclear medicine production, using the unique method developed by Necsa. This development will take place with scientists from both countries. There have been no discussions concerning research reactor deals.
A question was raised as to whether the chairman’s government authority to authorise Necsa executives to attend overseas functions had lapsed. Investigation showed that it had not and that none of the trips taken in the past year were unauthorised.
There is is no indication of any ‘unauthorised’ communications, media releases or any other Necsa communications. All such communications have been carried out through the Necsa system correctly.
Necsa is proud of the fact that in the previous financial year the company won an award from the Auditor-General for having totally clean books with no faults. A further source of pride is that Necsa paid tax on profits into SARS.
It is not true that the National Nuclear Regulator shut down the NTP facility for almost a year. The regulator shut a portion of the plant early this year for about 4 months while systems were improved by the Necsa CEO and his teams. The plant then restarted and ran better than before. A couple of months later the Necsa CEO decided to close the plant again for further systems improvements. Operations are now running well with an outlook of considerably improved performance. During the NTP interruption in the supply of important nuclear medicine Necsa reverted to standing international supply arrangements with international partners to arrange supplies to hospitals internationally.
We would like to wish Deputy Minister Thembisile Majola all the best in her retirement.