The Cape Town High Court has delivered a potentially fatal blow to the South African government's plans to bulldoze through a nuclear energy deal, declaring the plans invalid. The report found that the government did not follow due process in making the decision to pursue the nuclear power option, as well as in other important areas.
The court's ruling fulfills President Jacob Zuma's desire to finalize his nuclear program before leaving office in 2019, once his term ends.
The suit was brought to court by Earthlife Africa and the Southern African Faith Community and Environmental Research Institute. The two NGOs were challenging the way the state determined the country's nuclear power needs. The plan was for South Africa to purchase an additional 9,600 megawatts of nuclear power.
Judge Lee Bozalek ruled that the government's actions were unconstitutional and found five decisions made by the government illegal. These included the government's decision to proceed with nuclear construction and the fact that it handed over the procurement process to state-owned power company Eskom. The court also ruled that Eskom's request for information from nuclear vendors as part of its procurement preparations, which concluded on 28 April 2017, was invalid.
If the government still wants to pursue a nuclear deal, it will have to start from scratch. To do this legally, the process must be subject to close public scrutiny. The country's electricity regulator must hold a series of public hearings before approving record spending on infrastructure. And international agreements need to be scrutinized by Congress.
All of this takes time, and Zuma doesn't have that. And his successors are unlikely to be as enthusiastic about supporting a new deal as they have been in the past. Meanwhile, the facts about this transaction will become public. This will undoubtedly prove two of the biggest criticisms of the deal to be true. That is because the country cannot afford the deal, and because energy demand has shrunk, huge investments are no longer necessary.
As a result of this court's decision, the nuclear procurement issue has become one of the key indicators of South Africa's political health. It is not yet clear whether the South African government will appeal the Western Cape High Court's judgment or abide by it. A third option is for Mr Zuma to continue pursuing the agreement in defiance of the courts.
Demand and affordability
South Africa currently has enough electricity to meet its needs. This was not the case about five years ago, when widespread power outages hit the country. Since then, new power generation capacity has been added through the rapid introduction of renewable energy and the opening of his two new giant coal-fired power plants. Consumption, especially by industry, has been steadily declining due to sluggish economic growth and rising electricity prices. Eskom plans to close five coal-fired power stations after demand has fallen significantly.
The claim that the country needs an additional 9,600 megawatts was identified in a document created in 2011. These are now widely acknowledged to be woefully outdated. A recent study by the Energy Research Center at the University of Cape Town shows that the country does not need to consider nuclear power for another 20 years.
Numerous studies also poke holes in the government's claims that the country can afford the proposed nuclear construction. The Council for Scientific and Industrial Research has developed a model showing that new nuclear power is likely to be much more expensive than coal or renewable energy. The price ticket for nuclear power (more than R1 trillion by some estimates) does not take into account the costs of operation, fuel, insurance, emergency planning, regulation and decontamination at the end of a reactor's useful life. .
It would also place a financial strain on the country's finances, especially now that the economy is rated as having junk status.
hidden motives
So why is Mr Zuma still pushing for a deal? One source of pressure may be Russia. South Africa's former energy minister, Tina Joemat Pettersson, had been instructed to sign a contract with Russian power company Rosatom for the construction of a nuclear reactor. South Africa already has nuclear cooperation agreements with other countries, including the United States and South Korea, but courts have declared them invalid.
A more likely reason for Zuma's enthusiasm is the involvement of the Gupta family, with whom he has close ties. Family interests surrounding the nuclear deal are complex.
What is known is that the Gupta family controls South Africa's only dedicated uranium mine. The family has developed close relationships with key figures at Eskom. In November last year, the country's public protector at the time pointed out that directorships at companies owned by Mr Gupta and Eskom overlapped.
The report also suggests that Eskom CEO Brian Molefe had close ties to the family. These revelations led to his resignation shortly after the report was released.
Another element in the complex web is the fact that Zuma's son Duduzane is a business partner of the Gupta family, while other relatives are directly employed by them.
Despite his resolve, Zuma became increasingly isolated as he sought nuclear procurement. Opinions within the African National Congress are clearly divided on this issue. This is evidenced by the fact that President Zuma has resorted to a cabinet reshuffle to make way for more compliant ministers, ignoring the opinions of his party's senior leaders.
The private sector also opposes the idea, but the list of civil society organizations opposed to nuclear expansion goes far beyond the environmental lobby and includes a wide range of foundations, faith groups, human rights activists, and constitutional defenders.
high stakes
The Cape Town nuclear verdict shows that South Africa's legal system has not yet been “captured'' by private interests.
The key question is whether Mr Zuma and Eskom agree with the judgment, or whether they will challenge it while continuing to ignore the rule of law. This would not only destroy the country's constitution and democratic form of government, but also deny the people's constitutional right to participation in an energy democracy.
The stakes are high for both the country and the president. Will he continue to handle the country's energy future with impunity? Or does this ruling represent a setback for the democratic system envisioned by the framers of this country's constitution?
