In SAFCEI Press

Russian-linked consultancy among advisers on nuclear build

By Carol Paton

This article appeared in BDLive

Nuclear+energy+BDLive

Picture: THINKSTOCK

THE procurement process to build nuclear power plants has begun to gather pace with the appointment of transaction advisers last month, including global consultancy WorleyParsons, a company with a close working relationship with Russian nuclear vendor Rosatom.

The process is highly sensitive and every move by the Department of Energy will be scrutinised by competitor vendors, the political opposition and opponents of the nuclear project.

The appointment of WorleyParsons is sure to give rise to concerns, especially as events over the past two years have caused the Russians to be viewed as frontrunners for the project.

Department of Energy deputy director-general Zizamele Mbambo said on Friday that transactional advisers had been appointed for technical, legal, financial and commercial matters.

“We’ve got a range of technical advisers with whom we have been contracting. I don’t want to discuss any single company.

“The important point is that government is giving very high attention to this work. We need to make sure when we issue the request for proposals (RFPs) that we have done our work and its been independently reviewed by experts in the field. That is the reason for the transactional advisers,” he said.

Initially Energy Minister Tina Joemat-Pettersson had said the RFP would be issued by March after the Cabinet gave the go-ahead in December 2015. Mbambo said that the preparatory work was taking longer than expected because “we want to be thorough, credible and match up to international standards”.

He said a time frame would be outlined after input from the advisers. He would not specify what WorleyParsons had been briefed to do. But given the firm’s close working relationship with Rosatom and the Russian government, its status as “an independent” adviser may be questioned.

WorleyParsons is an Australian firm, which built up its nuclear expertise through acquisitions and projects in Bulgaria, where Russian VVR reactor technology is used.

The firm is involved in nuclear power plant construction with Rosatom in Turkey, Jordan, Armenia and Egypt.

It also worked with Rosatom recently in Bulgaria and Russia, two projects that are presently suspended. In several of these projects, WorleyParsons provided pre-construction consulting services, including in engineering, technical advice and the scoping of sites for preconstruction purposes.

In each of the six examples, Rosatom was later announced to be the preferred bidder for the construction of the project. WorleyParsons has also provided predelivery consulting services for new projects in Poland and Saudi Arabia, where Rosatom has expressed interest in bidding for the final project.

The relationship between WorleyParsons and the Russian Federation is also cemented through a joint venture between it and former Russian state-owned energy company Inter Rao Ues, with which it has a joint venture, holding 49%.

Inter Rao Ues is now a public company but its biggest shareholder remains the Russian state through the Roseneftegaz group, a state-owned electricity company.

A WorleyParsons representative in SA said the firm was unable to comment but would perhaps do so later.

The scope of the advice from WorleyParsons to the Department of Energy is unknown, and Mbambo said he could not comment on it.

Nonetheless, its appointment will further stoke fears that the deck is being stacked in favour of Russia.

In 2004 Russia and SA signed a co-operation agreement on the peaceful use of nuclear power, a development which the Russian news agency said at the time meant that it had already won the contract.

The contents of the agreement were kept secret for nine months and when finally revealed were noticeably more detailed than similar agreements with other countries.

The agreement is now at the centre of a court application by the South African Faith Communities Environmental Initiative and Earthlife Africa, which are arguing that SA intended to sign a binding agreement with Russia to build the new nuclear fleet.

Evidence for this, they say, was obtained through the discovery process when the Department of Energy was compelled through their court action to disclose the record of decision. Included in it was a legal opinion by the state law adviser on the draft agreement, which made it clear that it was “intended” and “understood as creating a firm commitment that Russia would construct the required nuclear plants”.

The wording at issue in the draft agreement is the same as that in the final agreement.

WorleyParsons also undertook a study for the Department of Trade and Industry to explore SA’s localisation capabilities. The localisation offer by vendors is expected to constitute a major part of the bid.

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