Nuclear

Policy uncertainty over nuclear build partly led to Necsa crisis, MPs told

Policy uncertainty over nuclear build partly led to Necsa crisis, MPs told

5th March 2019 BY: AFRICAN NEWS AGENCY 

Policy uncertainty over South Africa's nuclear build programme contributed to the crisis the South African Nuclear Energy Corporation (Necsa) and its entities currently finds itself in, MPs heard on Tuesday.

The board of Necsa and its entities were briefing Parliament's energy portfolio committee about the state-owned company which faces uncertainty after the Auditor General last week alerted MPs to the fact that Necsa's ability to keep operating is in question after it received a negative audit opinion in 2017/18, a mere year after it received a clean audit.

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While board chairperson Rob Adam told MPs Necsa remained a going concern for the moment, "the trajectory is towards it not remaining one".

Corporate governance failures, one of the reasons Energy Minister Jeff Radebe fired the Necsa board in December last year replacing it with a new one, was cited as a reason for the declining financial position as well as the expectation of a nuclear build programme – a plan which has since been put on hold.

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"For the best part of a decade and a half, there has been talk of a nuclear new build. Necsa has been requested to retain nuclear capabilities over that period and yet this new build never materialised."

The commercial viability of the Necsa entities which were preparing for a nuclear build programme which will not materialise in the near future has now been called into question. 

Adam hinted at possible retrenchments when he told MPs the R530-million grant it receives from Treasury would not cover the R800-million salary bill if Necsa does not return to commercial viability, which is unlikely to happen overnight.

"The only way to deal with this thing is the hard way. There's no rainmaker that's going to arrive and turn this into a cash cow."

Adam was appointed in December last year, after Energy Minister Jeff Radebe sacked the board, three of whom are challenging the decision in court.

At the time, Radebe cited acts of defiance, ineptitude and a failure to address serious setbacks with the production of medical radioisotopes, used in cancer treatment.

Operations at NTP Radioisotopes, a subsidiary of Necsa, came to a standstill in November 2017 after the National Nuclear Regulator (NNR) found transgressions on safety protocols. Revenue and profits dipped since then. NTP started limited operations in November 2018 and are still awaiting approval from the NNR to bring the plant into full operation.

Adam said he was however confident this particular subsidiary would reach the profits it did in 2017 fairly soon. 

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