Necsa board, chairman and CEO on the ropes…

December 2nd, 2018, Published in Articles: EE Publishers, Articles: Energize, Articles: EngineerIT, Featured: EE Publishers, Featured: Energize

Independent reports are being received by EE Publishers that energy minister Jeff Radebe has requested the Necsa board to provide reasons why it should not be removed, and that issues relating the Necsa chairman are central to this matter.

It appears that the issues raised by the minister with the board concern matters of governance, engagements with Russian nuclear interests and possible unauthorised research reactor deals with Russia’s Rusatom, overseas trips by the Necsa chairman and/or management, unauthorised media releases, articles and/or communications, and apparent conflicts of interest.

Formal questions have been put to Minister Radebe, to Necsa chairman Dr Kelvin Kemm and to Necsa CEO Phumzile Tshelane, including a request for confirmation as to whether the reports being received are correct or not, and/or whether there is any substance to these reports, to which Necsa has replied:

“The Necsa board and the minister of energy are engaged in discussions relating to the proper governance of the corporation. These engagements constitute the normal board and shareholder engagements and cannot be, at this stage, carried out in newspapers. Necsa expects that the outcomes may be communicated by the minister and/or the Necsa board at some stage.”

Necsa further indicated that as the Necsa board is appointed by the minister of energy, it would more appropriate for EE Publishers to approach the minister for further information, and not Necsa. At the time of publishing this article, no reply had been received to the questions put to the minister of energy, although confirmation was received that the minister had received the questions.

Necsa is the Nuclear Energy Corporation of South Africa, a state-owned enterprise undertaking R&D and commercial activities in the field of nuclear energy and radiation sciences, and the production of medical nuclear radioisotopes and associated services. Necsa is also responsible for processing source material, including uranium enrichment, and co-operating with other institutions, locally and abroad, on nuclear and related matters.

Apart from its main activities at Pelindaba, near Pretoria in South Africa, which include operation and utilisation of the SAFARI-1 research reactor, Necsa also manages and operates the Vaalputs National Radioactive Waste Disposal Facility in the Northern Cape on behalf of the National Radioactive Waste Disposal Institute (NRWDI).

Over the last few years, Necsa has been embroiled in a number of debilitating operational, financial and governance challenges.

As a result of safety procedure lapses, Necsa’s NTP Radioisotopes plant, which produced a significant share of the world’s commercial medical nuclear radioisotope, Molybdenum-99, was shut down by South Africa’s National Nuclear Regulator (NNR) in November 2017, which lasted almost a full year.

Several attempts to restart the NTP Radioisotopes plant were undertaken during the leadership of Thabo Tselane, a Necsa appointed NTP board member, who according to media reports, took over as interim group MD from Tina Eboka, when she and four NTP executives were suspended. Up until July 2018, these attempts by Tselane appear to have failed.

Since July, when the senior executives, including, Eboka, were reinstated after a nearly 7-month period of suspension, the process of rectifying shortcomings and bringing the operating and safety procedures in line with the requirements of the NNR seemed to have been marred by what appeared to be conflict between the boards and management of NTP Radioisotopes and its parent company, Necsa.

The problem was finally resolved after energy minister Jeff Radebe appointed deputy energy minister Thembisile Majola to assume full oversight of the board of NTP Radioisotopes from Necsa, which enabled more efficient communication between NTP, Necsa and the NNR.

It was announced in mid-November that the NTP Radioisotopes plant was back in (partial) operation after conditional approval to restart was given by South Africa’s National Nuclear Regulator (NNR).

NTP Radioisotopes normally has a revenue of about R1,3-billion a year, providing a contribution of more than 50% to the revenue of the Necsa group. The closure of the NTP Radioisotopes production plant for a year has therefore obviously had a significant financial impact.

There are also wider concerns regarding the financial health of Necsa. The Auditor General (AG) has raised ongoing concerns about inadequate financial provisions by Necsa for decommissioning and dismantling (D&D) costs at the end-of-life of Necsa’s SAFARI-1 research reactor.

As a result, Necsa’s annual financial statements for the year ending 31 March 2018, which were due to be published by end September 2018, have still not been tabled before parliament.

Note: This article will be updated as further information comes to hand, and/or a response from energy minister Jeff Radebe is received.

 Further reading

  1.  South African nuclear radio-isotope production facility back in business, but…” – by Mike Rycroft, EE Publishers, 20 November 2018.
  2. State-owned nuclear medicine maker reopens after crippling shutdown” – by Karyn Maughan, Sunday Times, 26 November 2018.
  3. Another nuclear safety scare at Pelindaba as management fumbles” – by Micah Reddy, amaBhungane, 20 June 2018.
  4. Is a nuclear success story about to be snuffed out?” – by Micah Reddy, Amabhungane, 5 February 2018
  5. Exclusive: Looking for Mr. Nuclear” – by Micah Reddy and Ferial Haffajee, amaBhungane, 28 February 2017.
  6. Nuclear storm brews as board tries to oust energy chief” – by Lionel Faull, amaBhungane, 24 July 2015.