The Pelindaba nuclear reactor plant near Pretoria. Picture: THE TIMES
The Pelindaba nuclear reactor plant near Pretoria. Picture: THE TIMES

Mineral resources & energy minister Gwede Mantashe has appointed seven new board members to the Nuclear Energy Corporation of SA (Necsa), with Eskom’s former chief nuclear officer Dave Nicholls as chair. This comes a week after the entire board resigned citing a dysfunctional relationship with Mantashe.

Necsa is the custodian of the country’s nuclear programmes, which include a medical radioisotopes business used in cancer treatment and fluorochemical manufacture. It has been technically insolvent since 2016 and has made a loss every year since 2014, with the exception of 2019, during which an adjustment of assets was made to the balance sheet.

After the resignations, Mantashe said the board was in the process of being replenished to “ensure it is properly constituted and also has the requisite skills”, and that a list of proposed names had been finalised for submission to cabinet.

He said it was the department’s intention to see a stable Necsa in the current financial year.

The new board, appointed on Tuesday, will serve for three years, and will also include Senamile Masango, Joseph Shayi, Aadilah Chowan, Gregory Jerome Davids, Mashukudu James Maboa and Namane Magau.

The department said the new appointments attest to  Mantashe’s commitment to ensure good governance in state-owned enterprises (SOEs) in the mining and energy portfolio. “The board members possess a wide range of skills in areas including nuclear regulation, nuclear analytical and calibration services, nuclear science, engineering, finance, law and corporate governance,” it said.

Mantashe also appointed Elsie Monale as a representative of the department.

The department said it has started the process of appointing the official representative of the department of international relations and co-operation to the board, as required by the Nuclear Energy Act.

In their resignation letter last week, acting Necsa chair Pulane Kingston and her three fellow directors accused Mantashe of frustrating and undermining their ability to carry out their fiduciary responsibilities. 

They provided a detailed report of work the board had done, which needed the minister’s approval. This included a turnaround plan for the business, as well as an urgent request that the government address the liquidity crisis at the company, which is at risk of trading recklessly.

The board has previously recommended that should neither of these two matters be urgently addressed by Mantashe, Necsa should be placed into “final liquidation”.

In most cases, their correspondence had not been acknowledged by the minister.

Nonresponsive minister

The directors had also made Mantashe aware that the company had a R325m liquidity gap for the financial year ending March 2020. In October, with a cash flow crisis imminent, the board requested permission to make use of ring-fenced funds to meet financial obligations, including the payment of salaries between December and March 2020.

Necsa, which is funded by the fiscus, will receive funding again on April 1. While fixed costs have risen over several years, budget allocations have fallen. Necsa has also realised less revenue from its commercial activities than it did previously. In November 2017, the National Nuclear Regulator shut down the nuclear medicine facility for 12 months over compliance concerns. It resumed production in November 2018.

The directors said the efforts to highlight Necsa’s precarious financial situation received scant attention from the minister’s office.

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