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Having been the subject of rather thin skinned responses from politicians over the past 24 hours, it’s a pleasure to share some good news from Davos. SA’s potentially bankrupting nuclear deal is far from a fait accompli. And there is a realisation in cabinet that the consequences are too big to allow it to be subjected to political interference.
After a fascinating interview with UN executive director Phumzile Mlambo-Ngcuka, I stayed on at the Brand SA Headquarters in the town’s Kirchner Museum. It wasn’t just the lunch which made it worth the wait.
Many South Africans’ biggest concerns about the country’s economic future are an unbridled spread of corruption – crony capitalism to give it the correct name – and poor allocation of resources by those who control the public purse.
From the outside, both these flags are raised very high in the proposed $100bn nuclear power deal.
To some extent, these warnings eased back a little for me after SA Energy Minister Tina Joemat-Pettersson‘s poorly attended press conference today on the country’s Renewable Energy programme. It’s a pity only a handful of journalists showed up. Because of all the wares South Africa has available for sale in Davos, this is probably the most authentic good news story.
Joemat-Pettersson gushed about foreign investor interest for the programme here in Davos, saying it was overwhelming. As it deserves to be. Each bidding round has attracted an increased number of multinationals who have delighted in the opportunity to test their latest equipment by harvesting some of SA’s natural sun and wind resources. Their bidding against each other ensures a continuously declining tendered price for consumers.
The other reason global giants are supporting the programme is because they trust the process. The 2 000 MW of renewable energy installed and another 10 000 mW in the pipeline translates into hundreds of billions of rand in fixed foreign investment. For that to happen, corporate boards require certainty and confidence in the integrity of the system.
So it was a delight to hear Joemat-Petterssen promise the proposed nuclear power deal will go through an identical process and will be handled by the same team that has managed the renewables programme so admirably. She noted that in 2012, the National Development Plan raised concerns over costs – and as we have persistently argued, if the NDP Commissioners fretted at R8 to the Dollar; they would be petrified at R16. And as an indication that the programme is far from certain she added: “Right now we have no idea of the costs.”
The most appealing part of the whole discussion, though, was her assertion that the proposed nuclear deal is so big an investment (“unprecedented” as the NDP stated) that it just cannot be subjected to political interference. Which would suggest that departed Finance Minister Nhlanhla Nene’s career limiting caution on the nuclear deal resonated in the right places. Very loudly.
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