South Africa says nuclear power deal with Russia in early stages

                         
                              

South Africa's nuclear cooperation deal signed this week with Russia is part of a tender process that will involve other competing countries and is not a contract to build power plants, government officials said on Tuesday.

The Russian atomic agency Rosatom said on Monday it had signed a $10 billion deal with Pretoria to install 9.6 gigawatts of nuclear capacity by 2030 to help Africa's most advancedeconomy cope with chronic electricity shortages.

However, South African government officials said the agreement was still in the early stages, after the main opposition party criticized the deal.

"There will be a South African procurement process of course. There will be other inter-government agreements signed," Xolisa Mabhongo, an executive at South African state agency Nuclear Energy Corporation, said from Vienna, where the agreement was signed.

The bidding process would be completed by mid 2015 before any final contracts were signed, officials said.

"They (Rosatom) jumped the gun," a senior South African government source, who is part of the country's delegation to an International Atomic Energy Agency conference in Vienna, told Reuters.

"These kinds of inter-governmental agreements are standard with nuclear vendor countries. We foresee that similar agreements will be signed with other nuclear vendor countries,France, China, Korea, the U.S. and Japan."

Rosatom officials were not immediately available to comment.

South Africa has an energy plan in place to build six new nuclear power plants by 2030, providing 9,600 megawatts (MW) of power at a cost estimated between 400 billion rand and 1 trillion rand ($36-$89.9 billion).

But the energy department said last December it may delay the program and focus instead on coal, hydro and gas as alternative energy sources

On Tuesday, South African energy analysts and opposition parties criticized the Rosatom agreement, saying the government was making expensive "backroom deals" which flouted procurement procedures.

"My suspicion is Rosatom are talking up their side and it has been very badly handled by our government," the opposition Democratic Alliance's Lance Greyling said.

"It is also worrying that the announcement first came from Rosatom. It suggests backroom deals going on."

South Africa's credit rating could be threatened if it commits itself to nuclear installations it cannot afford, Nedbank economist Dennis Dykes warned.

"Hopefully ... there will be a lot more transparency before we actually have a final decision made," he said.