NEWS

Rosatom: The Small Office With An Apparently Big Influence In South Africa's Looming Nuclear Deal

It's an office that's more accessible than you'd expect.

21/02/2017 20:55 SAST | Updated 28/02/2017 09:41 SAST

For the role it occupies in the popular nuclear South African imagination, the first thing I notice is that the Rosatom office is small. In the heart of Sandton, the Africa regional office of Russia's powerful nuclear parastatal is also simple with no outward grandeur for an organisation its critics describe as a state within a state.

It's also rather accessible. I made a single call to press secretary Ryan Collyer and then pitched up for a meeting a few days later. Rosatom has long been believed to be the frontrunner agency in the South African race to nuclear power. This stems largely from the emergence in 2014 of an inter-governmental agreement between South Africa and Russia for the installation of nuclear power plants.

"We are here for business, not for politics. And if we can monetise our expertise, why not?"Viktor Polikarpov

Now, Rosatom's regional vice-president for Africa, Viktor Polikarpov, says the agreement has no legal standing. "The press release (announcing the agreement) was a bit awkward. Things got lost in translation. All it did was show readiness by Russia to build the power plants. It showed the scope of business and is not a commercial agreement."

Polikarpov is a former head of the Russia-South Africa business council and he has worked for Gazprom in South Africa as well as for oligarch Viktor Vekselberg's Renova in many countries across Africa. He knows his turf well and Rosatom's signing up agreement after agreement in Kenya, Ghana, Tanzania, Nigeria and other emerging economies in sub-Saharan Africa. In Nigeria, it runs a nuclear research centre; in Tanzania, the company is researching food irradiation techniques to facilitate exports to European markets.

"Africa will be a leading nuclear market," Polikarpov predicts.

Rosatom is an arm of Russia's foreign policy and a key marker in its geopolitical plans. Consequently, the company offers attractive financing options to countries with cash-strapped treasuries. It offers to build, operate and transfer power plants or to enter into longer-term arrangements where it provides the core finance and acts as a joint venture partner. This, along with its expertise, makes Rosatom attractive, says Polikarpov, who bridles at suggestions that it will likely win the deal despite the appearance of an open tender. Critics say that President Jacob Zuma's close personal relations with Russia's President Vladimir Putin mean the deal is practically sealed.

Rumours abound of advance payments being made, which Polikarpov repeatedly denies.

"I don't know of any personal relations between Presidents Putin and Zuma. When they (the critics) speak of Zuma frequenting Russia, they don't point out it's part of a schedule and that he sees Putin much less frequently than he meets the Chinese premier.

"We are here for business, not for politics. And if we can monetise our expertise, why not?"

The prospect of nuclear has built up a head of steam in South Africa because of the country's history of corruption alongside big procurement tenders like those for the arms deal and in infrastructure projects. Multinationals have a nasty reputation for paying backhanders to grease deals. Polikarpov says the benefits outweigh the risks as the localisation of a nuclear deal offer significant industrialisation upsides by growing a new nuclear industry including in nuclear medicine and other sub-sectors.

Despite significant domestic and civil society pressure, a request for proposals for nuclear power was finally put out by Eskom in December and 27 companies have responded to the request, including Rosatom.

At the same time, reports by Parliament's budget office as well as by the CSIR have found that with renewed and lower economic growth projections, South Africa does not need nuclear as part of an energy mix now. But Eskom is determined that nuclear should form part of the country's energy security planning.

"My understanding is there should be nuclear," says Polikarpov, adding, "it should be there for sure but the whole programme may not be achieved. And we certainly don't think it needs to cost R1.2 trillion," he says. While the Earthlife court case will contest the costs of and need for nuclear, Polikarpov says: "If it doesn't happen now, South Africa will find itself in an energy crisis where base-load (the basic energy requirement of a country) will need to be replenished."

Polikarpov sometimes come across like a nuclear executive who has been waiting for Godot — someone engaged in an endless and existential wait for something that he does not completely trust will happen. The nuclear deal has been delayed several times. "In South Africa," he says "anything can happen." Or nothing can happen.

amab

The amaBhungane Centre for Investigative Journalism, an independent non-profit, produced this story. Like it? Be an amaB supporter to help it do more. Sign up for its newsletter to get more.