Business Day journalist Carol Paton, who has a reputation for excellent sources, wrote on Monday that “the decision was made at the last Cabinet meeting of the year on Wednesday, after which Nhlanhla Nene was fired as finance minister. The approval was not announced by Minister in the Presidency Jeff Radebe in his Cabinet briefing on Friday.”
Acting Cabinet spokesperson Phumla Williams told Fin24 in a brief response on Monday that she was not aware of this. “(I) saw it in Business Day.”
Nene stalled the 9 600 MW nuclear build programme, saying it was too expensive in the current economic climate. He had allocated R200m in his mini budget for the departments of energy and finance to investigate the costing of the programme. There were no indications of this having produced any results.
Paton said “several independent studies have found that the cost of new nuclear energy will be greater than energy produced by other technologies”.
The nuclear process has been veiled in secrecy for over a year. As a result, non-governmental organisations (NGOs) Earthlife Africa Jhb and the Southern African Faith Communities Environment Institution approached courts to challenge government’s plans to procure nuclear reactors.
Nomura emerging market analyst Peter Attard Montalto told Fin24 on Monday that if Cabinet had approved the programme, it was very serious.
“I believe this move is illegal under the Public Sector Finance Management Act. Major public procurement projects have to have National Treasury cost-benefit analysis and affordability sign off.”
Montalto believed Treasury provided initial evidence to Cabinet that thwe project was unaffordable, which was the “wrong” answer for Zuma. “Hence Nene was ousted,” he said.
Montalto said Finance Minister Pravin Gordhan had always objected to the nuclear deal due to the cost and the possibility of corruption.
“He was in the Cabinet meeting when it was approved (by a majority) and would not have been presented with funding/guaranteeing, as it was a done deal back at National Treasury. Maybe he even didn’t object to it given it wasn’t his area at cooperative governance?” – Fin24