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Eskom requested Treasury to waive nuclear procurement regulations

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Eskom has confirmed asking National Treasury to grant it exemptions from procurement regulations for its nuclear power expansion programme.

Dave Nicholls, the utility’s chief nuclear officer, said he submitted a request to the office of the chief procurement officer in late May to waive certain requirements in terms of Public Finance Management Act regulations relating to the funding and the period for which tenders remain valid.

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“Eskom can confirm that during the discussions with National Treasury’s Office of Chief Procurement Officer on 28th March this year, Eskom raised the areas of the current National Treasury Regulations (under the PFMA and PPPFA) which might need to be waived for the proposed Nuclear New Build Procurement (NNBP) process,” Nicholls said.

Eskom is asking for the period of bid validity to be extended from 12 weeks to two years, as well as a section of the Standard for Infrastructure Procurement and Delivery Management (SIPDM).

“The need for the waiver on the SIPDM gate 4 was to align the process with the Cabinet decision for the vendors’ responses to the Request for Proposals to form the basis of the funding model that had to be submitted to Cabinet by the department of energy.

“Therefore the finalisation of the budget and funding issues would not be possible prior to RFP issue,” Nicholls added.

He said the other issue that was raised was the “feasibility study” requirement of the SIPDM, because it was introduced last year, by which time Eskom had already done a considerable amount of ground work.

Eskom therefore wanted to be assured that the preparations it had done prior to the promulgation of the SIPDM would meet the criteria it sets.

“The SIPDM came into force on the 1 July 2016, and predates the work done by Eskom on the feasibility of new nuclear power stations, as well as the Gazetted IRP of 2010. There was discussion of the need to confirm that the work done to date met the objective criteria of the requirements of the SIPDM,” Nicholls said.

Eskom’s application for a waiver is likely to further fuel opposition to the contested nuclear build, which critics say the country does not need and cannot afford, and was flagged by ratings agencies as a financial risk.

The power utility is forging ahead with plans to build nuclear reactors that will add 9,600 megawatt to the power grid, in line with the 2010 Integrated Resource Plan (IRP), even though the draft IRP released last year forecasts that the country will only need more nuclear by 2037.

It issued a request for information in December and is expected to issue a request for binding proposals from vendors by the middle of the year.

The DA’s energy spokesman, Gordon Mackay, said the application appeared to be a bid to speed up the nuclear build and the party would oppose it.

“This is an apparent bid to accelerate the nuclear new build programme. Rushing through the procurement process is simply unacceptable and the DA will oppose any attempt to do so.”

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