National Nuclear Regulator, Nuclear Energy Corporation Annual Reports: briefings

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Mineral Resources and Energy

03 November 2004
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MINERALS AND ENERGY PORTFOLIO COMMITTEE
3 November 2004
NATIONAL NUCLEAR REGULATOR, NUCLEAR ENERGY CORPORATION ANNUAL REPORTS: BRIEFINGS

Chairperson:
Mr E Mthethwa (ANC)

Documents handed out:
National Nuclear Regulator presentation
Nuclear Energy Corporation of South Africa presentation
Nuclear Energy Corporation of South Africa Annual Report (available at
www.necsa.co.za)
National Nuclear Regulator Annual Report

Nuclear Energy Corporation of South Africa website
National Nuclear Regulator website

SUMMARY
The Committee received briefings from the National Nuclear Regulator (NNR) and the Nuclear Energy Corporation of South Africa (NECSA) on their 2003 / 2004 Annual Reports. Both briefings concentrated on achievements, challenges and key strategic objectives for the forthcoming financial year.

Members were mostly concerned with South Africa’s continued investment in and development of nuclear energy facilities. Some argued strongly that nuclear funding should be diverted to alleviate poverty and the country’s other social spending priorities. They were also concerned at further state funding being allocated to ESKOM’s Pebble-bed Modular Reactor project and questioned whether the country had the required scientific and regulatory skills to ensure public safety in nuclear energy matters.

MINUTES

National Nuclear Regulator
Briefing
The Acting CEO, Adv L Zondo, said some of the highlights of the 2003 / 2004 Annual Report was that the operating license of the Koeberg Nuclear Power Station (KNPS) had been renewed; that a safety assessment of the station indicated no concerns for public health and safety; that the station’s emergency response plan had been tested and found to be within international standards and that the NNR had renewed the licenses of 48 senior nuclear reactor operators at Koeberg.

Other 2003 / 2004 highlights included the resolution of key license issues for the Pebble-bed Modular Reactor (PBMR) project; that a significant improvement had occurred in the safety culture associated with the project; that the transportation of radioactive waste material was conducted without incident and that NECSA’s licenses for operating the Pelindaba and Vaalputs facilities were re-issued after physical safety concerns were addressed.

The NNR’s major challenges were that the regulations required in terms of the National Nuclear Regulator Act had not been finalised yet by the Department of Minerals and Energy (DME); that radiation at minerals processing facilities was still not adequately addressed due to lack of resources and constant mine ownership changes due to black economic empowerment and that the NNR could not fill vacant positions due to a lack of funding and a limited skills pool in SA.

The NNR’s key strategic objectives were to perform safety assessments and to issue operating licenses for nuclear facilities; to implement a communication strategy to ensure that it performs its mandate to the satisfaction of stakeholders; to improve business management systems and a special focus on capacity development and mechanisms to recruit skilled personnel.

Discussion
Adv H Schmidt (DA) wanted to know if physical safety concerns at NECSA’s Pelindaba facility had been addressed satisfactorily and why the NNR’s staff costs had risen by more than 12 percent during 2003 / 2004.

Adv Zondo confirmed that the safety concerns had been addressed leading to the re-issue of an operating license to NECSA. The NNR was constantly monitoring the situation. She pointed out that the increase in staff costs was due to the use of the total cost to company figure which included medical and pension provision.

Prof I Mohammed (ANC) asked why Adv Zondo was employed in an acting capacity, whether fuel was already being produced for the PBMR project, what the status of the country’s high-level nuclear waste disposal strategy was and why the NNR still had a defined benefit pension fund while government had moved to a defined contribution system.

Adv Zondo responded that her three-year term had recently expired and she wanted to pursue other interests. However, she was staying on in an acting capacity until a successor had been found. Fuel was not being produced for the PBMR but the NNR was reviewing an application by ESKOM to that effect. The DME had as yet only produced a draft waste management strategy and the NNR would not comment until the consultative process had been completed. The NNR had inherited the defined benefit pension fund and, in terms of the NNR Act, could not reduce any of the benefits of employees who had been transferred from other agencies on the formation of the organisation.

Mr C Kekana (ANC) asked whether the continuation of spending on nuclear energy was appropriate to a country which had massive social responsibilities that required funding. Adv Zondo said that government policy stipulated that nuclear energy should be pursued at this point. Government’s position was unchanged and she declined to express a personal opinion on the continued investment and spending on nuclear energy.

Ms C Tinto (ANC) asked whether the NNR had any plans to create jobs at the lower levels of the organisation. Adv Zondo responded that the NNR would employ young graduates at entry level and then contract consultants to train them until they were able to move into more senior positions.

Mr B Ncgobo (ANC) asked how the NNR would benchmark the PBMR commissioning process as no such international benchmarks existed and who had contributed to the funding of the project.

Adv Zondo pointed out that she had not said that the PBMR was ready for commissioning, but that the NNR had completed a safety culture audit of the project. She added that the reactor design was still evolving and commissioning benchmarks would not be in place until the design process had been completed. Further, fuel production and processing benchmarks had been established in China and Germany. She also said that the NNR was not involved in the funding of the PBMR as it was an ESKOM project in conjunction with its partners. The NNR played only a regulatory role.

Adv Schmidt asked if the NNR was involved in the pricing of electricity at all. Adv Zondo pointed out that the NNR focussed on nuclear safety regulation only and was not involved in the economic aspects of nuclear energy.

Prof Mohammed pursued the waste management policy issue and asked what future sites would be considered for the storage of high-level radioactive waste. Adv Zondo repeated that the country’s waste management policy was still in draft form and that the NNR would wait until the completion of the consultative phase before it commented on future storage sites. She added that the NNR would only then know what regulatory role would be expected of it.

Nuclear Energy Corporation of South Africa briefing
NECSA CEO, Mr S Thobejane, said the company’s long-term growth strategy, Vision 2010, sought to pursue nuclear technology excellence for sustained social and economic development. The company provided nuclear technology products and services to local and international customers.

NECSA spent R1.6 million during 2003 / 2004 on staff training and skills development. It had also formed a joint venture with French nuclear technology company, Areva, for training and staff development.

NECSA received an operating license for its Pelindaba site as a whole and consultants found its Environmental Monitoring System to be comprehensive and compliant with regulatory and legal requirements.

Its most recent achievements included conversion of the Safari 1 reactor to locally produced fuel; growing the reactor’s involvement in the PBMR project; establishment of a new waste management agency within the organisation; upgrading of nuclear waste processing facilities, and participation in the development of technology for deep geological disposal of nuclear waste.

NECSA faced a number of challenges including accelerated expansion of capacity to perform research, development and training; the expansion of collaborative networks and accessing additional funding; removal of a R290 million post-retirement medical aid liability and the retention of skilled human capital in the nuclear field.

The strong rand had had a very negative impact on NECSA’s financial performance and its cash flow position was drawn down by R57 million due to declining export earnings. It sold its Nuclear Technology Products (NTP) division for a profit of R199 million, but this profit was counteracted by a R290 million post-retirement medical aid provision.

The company had instituted a recovery plan that included foregoing salary increases and implementing drastic cost-cutting measures.

Discussion

Due to time constraints, few questions were asked of the NECSA delegation. Mr Ngcobo asked about the recent discoveries linking South African nuclear scientists and businesses with the proliferation of nuclear technology and how NECSA would manage the retention of its intellectual capital. Mr Thobejane said that since 1994 South Africa had lost a large number of highly skilled nuclear scientists. NECSA had no control over their activities, but had implemented a programme to retain existing skills for the foreseeable future.

Mr Kekana asked whether South Africa should continue funding new nuclear technology. Mr Thobejane said that NECSA’s future relied on the development of new technology in fields such as health and agriculture, and the PBMR project. NECSA would cease to exist if the country abandoned all nuclear energy related projects.

In light of the Committee’s recent oversight visit to NECSA Headquarters in Pretoria, the Chairperson requested Members to forward their remaining questions to NECSA in writing. Mr Thobejane undertook to respond promptly to these questions.

The meeting was adjourned.

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