Opinionista Mark Swilling 12 February 2018

Zexit, a nuclear deal and Russia’s strong-arm persuasion

The Betrayal of the Promise report suggests that the Russians funded the ANC’s local government election campaign. Whatever leverage Russia may have, it is safe to assume it exists to realise a return on all the efforts made thus far and that this is why President Jacob Zuma has more than likely insisted on the implementation of the nuclear deal as a condition for agreeing to quit.

South Africa held its breath last week as it waited for ANC president Cyril Ramaphosa to take decisive action to speed up what many are now calling Zexit – the long-awaited departure of Jacob Zuma as president and his replacement with Ramaphosa, the newly elected ANC president. Media speculation, dinner table conversation, shebeen debates and countless informal discussions were dominated by speculation that Zuma’s conditions for leaving were all about protection from prosecution and related matters.

What few noticed was a meeting that took place on 8 February on the sidelines of the Mining Indaba, between the Russian Minister of Natural Resources and Environment Sergey Donsky, Russian Ambassador Michail Petrakov, Energy Minister (and former State Security Minister) David Mhlobo, and the chairperson of South Africa’s Central Energy Fund. [1] There are unconfirmed reports that the Guptas’ Bombardier plane flew to Russia the day before this meeting, coupled to speculation that Zuma was either going to meet Putin or have a conference call.

Although statements after the 8 February meeting from the Department of Energy denied such a discussion was about the nuclear deal, claiming instead that it was about co-operation with respect to the future of the platinum group of metals, the real story is far more sinister. Those who are privy to the negotiations between Ramaphosa and Zuma know full well that Zuma is terrified, and that this has got something to do with the nuclear deal. Could it be that one of Zuma’s primary conditions for quitting is that the nuclear deal must be implemented after his departure? Is this his prize “legacy project”? And have the Russians threatened him or his family in some way?

There was a marked sea-change in Zuma’s tactics after Ramaphosa announced in Davos on 25 January that nuclear was not an option – as he put it, “we have excess power and no money”.[2] Suddenly Zuma starting taking a hard line, resulting in protracted negotiations, and a gradual weakening of Ramaphosa’s standing within and outside the ANC. There is even speculation now in certain circles that he wants to stay on until April when social grant mayhem 2.0 could break out, creating grounds for the declaration of a State of Emergency. This may be far-fetched, but there are some desperate men in power now.

In his 12th Cabinet reshuffle while President, Zuma appointed former State Security Minister David Mahlobo as Minister of Energy in October 2017. His predecessor, Zuma acolyte Mmamoloko Kubayi, was in the job for only five months. As a crucial lynchpin of the power elite that executed the “silent coup” that displaced the ANC from setting the political agenda during the years 2014-2017,[3]  Mahlobo is clearly trusted by Zuma to be a can-do man who also has excellent relations with the Kremlin’s intelligence community.

While in office Kubayi initiated the process to update the Integrated Resource Plan (IRP) by February 2018 – the IRP being South Africa’s national electricity plan for the period 2010-2030. After replacing her, Mahlobo immediately accelerated the IRP process, claiming he would have it ready by November 2017, and forced his officials to work extra hours and weekends to get the job done.[4] It was clear that his agenda was to entrench nuclear power in the future energy mix. To date, we don’t have an IRP even though Mahlobo claimed at a press conference on 8 December during the Energy Indaba that the Cabinet approved the IRP on 6 December after a 12-hour meeting.[5]  This is also where he nailed his colours to the mask when he claimed in his speech to the conference: “Delegates, I wish to re-state that nuclear remains an integral part of the energy mix of the Republic.”[6] Forty-eight days later, the newly elected president of the ANC would flatly contradict him. And now it is February, and no IRP.

As argued in the Betrayal of the Promise report, the 9.6 Gigawatt nuclear deal between Zuma and Putin lies at the very centre of State Capture and the silent coup.[7] For Russia, whose foreign policy is essentially about clearing the way for Rosatom (Russia’s energy agency), building a nuclear power plant in South Africa is its top foreign policy goal – Russian nuclear power plants are a kind of hybrid between an embassy and a military base. This is why there are Russian intelligence operatives located in the Presidency to assist with strategy and communications.

Although the Cape High Court ruled in April 2017 that Zuma’s deal with Putin was illegal, the Zuma-centred power elite want this deal so badly because of decisions dating back to 2010. The Guptas and Duduzane Zuma bought Uranium One’s Dominion Mine in 2010, renaming it Shiva Uranium, using a loan from the IDC. In 2011 Zuma established the ad hoc inter-ministerial National Nuclear Executive Committee to oversee the implementation of the nuclear programme. In 2015 while attending a BRICS Summit in Russia, Russian officials presented then Minister of Finance Nhlanhla Nene with a badly written draft letter for his signature that would have granted the Russians a state guarantee to finance the nuclear building programme. He refused to sign it, and presented his reasons why at a Cabinet meeting on 9 December 2015. The Department of Energy presented a counterproposal that was accepted. Hours later Nene was fired.

The nuclear deal would cost South Africa R1.2-trillion, with annual repayments of R100-billion. Foreign debt could increase from R1.9-trillion to R3-trillion. However, Mahlobo is on record insisting that nuclear costs 35 c/KWh , compared to renewables which, he argued, cost between 80c and R1/KWh[8]. These figures have no validity in light of the rigorous scientific analysis conducted by the CSIR which found that in 2016 the price of renewable energy was 62c/KwH over the life cycle, compared to coal which was R1.03-R1.20/KwH and nuclear was R1.30/KwH respectively over the life cycle.[9] Like in 60 other countries in the world, renewables are now cheaper in South Africa than fossil fuel-based energy.

It is perfectly plausible that money has already changed hands, possibly recorded in ways that could compromise Zuma. Or else Zuma has somehow been threatened, for example retaliations against his family. The Betrayal of the Promise report suggests the Russians funded the ANC’s local government election campaign. Whatever leverage the Russians may have, it is safe to assume it exists to realise a return on all the efforts made thus far and this is why Zuma has more than likely insisted on the implementation of the nuclear deal as a condition for agreeing to quit. No matter what the outcome of Sunday’s ANC meeting is, it is unlikely any of this will be admitted. What we need to watch is whether Ramaphosa changes his tune when it comes to nuclear power. If he does, we will know what deal went down. DM

[1] Energy Dept Say Mahlobo Meeting With Russian Couterpart a Courtesy. EWN, 9.2.2018
[2] . ‘We have excess power and no money’ – Ramaphosa on nuclear plan. Business Report, 25.1.2018.
[3] . Swilling, M. et. al. 2017. etrayal of the Promise. Johannesburg and Cape Town: State Capacity Research Group.
[4] Mahlobo rushes nuclear deal. City Press, 5.11.2017
[5] . S. Africa: Cabinet revised Integrated Resources Plan. ESI Africa, 8.12.2017.
[6] . Ibid
[7] . Swilling, M. et. al. 2017. etrayal of the Promise. Johannesburg and Cape Town: State Capacity Research Group.
[8] . Mahlobo rushes nuclear deal, City Press,  5.11.2017.
[9] . CSIR, 2017. Electricity scenarios for South Africa: presentation to the Portfolio Committee on Energy. Cape Town, 21 February 2017.
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