chief executive's message
It is Pebble Bed Modular Reactor (Pty) Limited’s
desire to establish a nuclear industry that is part of
the world market from the outset.
BUILDING A WORLD-CLASS COMPANY
Eight years after the establishment of PBMR, the company finds itself in an envious, but also challenging position.
From a small research and development company with barely 100 employees at its inception in 1999, Pebble Bed Modular Reactor (Pty) Limited has grown into the largest nuclear reactor design team in the world for Generation IV Reactors.
In addition to the core team of some 700 people at the PBMR head office in Centurion, about a 1 000 people at universities, private companies and research institutes are involved in the project. We have opened the global stage further and in many respects have become the focus of the world’s nuclear sector.
In order to secure future sales and build a viable commercial business, the company needs to first prove and demonstrate the technology in a demonstration power plant (DPP). From a business planning point of view, it is therefore important to focus the company’s efforts in the short to medium term on the successful building of the DPP, together with the timely construction of a pilot fuel plant (PFP) in order to successfully commission the DPP with nuclear pebble fuel by 2013.
In parallel, PBMR also needs to plan for and schedule all activities that will be required to successfully commercialise the business in the long term. Two such long-term objectives, that require focus at this early stage, are the development of fuel manufacturing technology for a commercial fuel plant and the design of a process heat plant.
I would like to reiterate that PBMR as a nuclear company puts safety, health, the environment and quality first. The company collectively adopted the slogan “Safety is in our Power” during 2006 and aims to be the first successful supplier of commercial Generation IV nuclear power plants in the world.
Good progress has been made in the year under review in pursuit of the company vision. Two test facilities have been commissioned at the University of North-West in Potchefstroom, to perform high-pressure and high-temperature heat transfer tests in pebble bed cores.
In 2007, a helium test facility (HTF) was commissioned at Pelindaba. This testing facility will enable the first full-scale operating tests on the critical components of the reactivity control system, reserve shutdown system and the fuel handling system. All active components such as valves and measuring equipment will be tested in an actual high-temperature, high-pressure helium environment. These tests will provide crucial and early feedback regarding the performance of equipment designed and built for the high-temperature and high-pressure helium environment.
Another highlight during the year was the Minister of Environmental Affairs and Tourism’s decision to uphold the positive record of decision on the environmental impact assessment (EIA) for the PFP to be built at Pelindaba. The Minister also de-linked the EIA for the PFP from that of the DPP. This means that – from an environmental perspective – manufacturing of fuel can commence even should the regulatory approvals for the DPP still be pending.
The Nuclear Energy Corporation of South Africa (Necsa) is the applicant for the PFP just as Eskom is the applicant of all legal and procedural matters for the DPP. Currently, under consideration, is an application to change the applicant for the PFP from Necsa to PBMR.
With regards to the EIA on the DPP, the scoping report is presently with the Department of Environmental Affairs and Tourism. Public meetings will be held later in the year and we are anticipating for a positive conclusion of the EIA for the DPP in 2008.
“ Government’s continued support for the project was demonstrated by an allocation
of R6 billion to PBMR for the next three years.”
BUILDING A NATIONAL ASSET
PBMR aims to evolve over the next two decades into a national asset for South Africa by becoming a world leader and global player in the high temperature reactor (HTR) field.
| (i) | Sasol, with its gas to liquids technology, competing in the world petrochemical market; and |
| (ii) |
Urenco, with its centrifuge uranium enrichment technology, competing in the world nuclear enrichment services market. |
- German technology has been a key basis for each activity;
- Both Sasol and Urenco are highly successful companies. Such commercial success did not, however, come overnight. The nature of their industries required the basic scientific invention to be proved in
proudly south african engineered demonstration facilities and continued technical evolution. PBMR follows this path. - A strong domestic market is essential to provide a launch pad for global expansion.
- Strong government support and investors with a long-term strategic interest in the nuclear industry, was important for Urenco and is for PBMR.
- Commercial success of the technology contributes significantly to the local economy.
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Continuous efforts ensure the development of skills in order to instil an organisational culture of safety, health and quality; and to build and enhance internal systems and processes to ensure efficient and effective delivery. It is believed that capacity building, human resource strategy, change management, training and the day-to-day operations required to invest in and build a first-class organisation, will remain a crucial and continuing process within PBMR over the next three to four years. |
It is therefore PBMR’s desire to establish a nuclear industry that is part of the world market from day one. PBMR and the nuclear industry in the country are going to seek manufacturers that can supply as part of the global supply chain. In pursuit of this, a national effort has been launched to upgrade the nuclear industry’s manufacturing capabilities in South Africa. In addition, PBMR has put an aggressive skills development programme in place with the intention to manufacture, most of the components for the PBMR technology, in South Africa.
Initially, components will be procured from international sources – based on economic reasons – but as orders increase and volumes rise, it is envisaged that localised South African production would be sought from foreign suppliers. Once orders for a fleet of reactors are placed, major overseas companies will be under obligation to establish local manufacturing facilities.
On the international front, PBMR will continue to have strategic discussions with international companies concerning manufacturing capabilities that could be developed in South Africa on the basis of an industrial development strategy.
BUILDING THE ORGANISATION
As a growing enterprise focused on delivery, it has become crucial for PBMR to build an organisation that has the capacity, skills, culture, systems and processes necessary to deliver on all its obligations. The employee complement is foreseen to grow to over 1 000 within the next three years.
It has been an enormous challenge to assimilate these numbers of new employees into the nuclear organisation from an induction, training, organisational design and change management point of view.
Seven strategic imperatives have been carefully selected to assist in translating, communicating and achieving the common vision and focus of management. These imperatives are used to frame the business plans for 2008.
Strategic focus areas 
We have established a workplace forum which is voted in office by employees to enhance a participative relationship. By signing the constitution of the workplace forum, we committed ourselves to a workplace which is supportive of the rights and dignity of all employees and acknowledge the rights of employees to participate in consultative and business decision-making processes. We strive to maintain at all times constructive relationships.
In addition, our human resources policies and practices were subjected to an external audit in 2006 to ensure that they are aligned with legislation and best practices. As part of this, our terms and conditions had to be amended, which was successfully done through a consultative process with the workplace forum.
To ensure that all aspects of our employees’ needs are taken care of, PBMR has enlisted the services of a professional firm to provide an employee wellness programme. The programme provides professional, confidential assistance for personal problems of any nature to employees and their household members. Employees are therefore encouraged to take constructive actions to resolve any personal problems that negatively affect their on and off the job behaviour.
We regard employment equity (EE) as a serious business imperative. To this end, PBMR has established a three-year EE plan with qualitative affirmative action measures and numerical targets. The workplace forum consulted with the employees regarding the plan and it has subsequently been approved by the PBMR Board.
The targets for technical positions are proving particularly difficult to achieve due to the shortage of skills in these areas. It is also difficult to retain people in a short supply marketplace. We remain, however, committed to achieving them through mentorship programmes, succession management, the establishment of an accelerated development programme, as well as networking and relationship building with universities, thereby increasing the provision of engineering and technical skills into the company.
The employment equity forum is also working hard to facilitate the implementation of interventions targeted at enhancing employment equity within PBMR. This forum has placed particular emphasis for this year on communication and diversity awareness, the development of technical skills and the advancement of women and people with disabilities.
The WiNPBMR (Women in Nuclear – Pebble Bed Modular Reactor) organisation was launched in August 2006 and is the PBMR branch of the organisation Women in Nuclear South Africa (WiNSA). WiNPBMR will actively promote the vision and mission of WiNSA inside the PBMR. Women in Nuclear (WiN) is an international association of women working professionally in the fields of nuclear energy and application of radiation and nuclear technologies. WiNSA is the South African counterpart of WiNGlobal and WiNPBMR is the PBMR’s branch of WiNSA.
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Ms Refilwe Moerane holds the position of Chief Auditor, Quality Engineering at PBMR (Pty) Limited in the Fuel Division. She was appointed as WiNSA chairperson during April 2006. |
BUILDING NATIONAL CAPACITY
In order to be internationally competitive, we have to ensure the sustainability of capacity within PBMR and the nuclear industry. National capacity building within PBMR, is therefore focused on the establishment, implementation and maintenance of strategies, systems and processes required for the proactive and focused development of PBMR’s core and support competencies.
PBMR must ensure it has the necessary human resource capability with the appropriate competency profile to realise its business goals and objectives. We are thus committed to the development of our employees as one of the strategies employed to reach our business goals and objectives.
The purpose of training and development in the nuclear industry is to provide competent personnel who can design, build, safely operate, maintain and improve performance of the plant. To achieve this purpose, the nuclear industry uses a systematic approach to training, based on the job performance requirements, to guide the training and evaluate the competence of PBMR employees.
It is PBMR policy to correctly identify the knowledge, skills and abilities necessary to perform tasks affecting nuclear safety and ensure that only those that successfully complete the relevant training, recognition of prior learning and assessment, will be deemed competent.
In pursuit of this goal, PBMR also sponsors bursary schemes enabling employees to improve their knowledge. One such scheme is aimed at students who are dedicated to following careers primarily in the fields of engineering, science and technology. This will ensure that PBMR builds capacity through a sustainable student pipeline. This decision is seen as a strategic imperative to ensure PBMR has a professional, competent, versatile and motivated workforce within the nuclear industry, to build a strategic competitive advantage.
Another initiative of the PBMR programme is to provide a significant development for South Africa in the field of nuclear science and technology. This supports the government’s vision for the PBMR in an emerging nuclear industry within South Africa. The Department of Science and Technology has undertaken to establish a coordinated programme to advance skills and innovation frontiers along the whole technology value chain within the nuclear industry. The South African Nuclear Human Asset Research Programme is a consensus of key stakeholders within the nuclear industry in South Africa.
The PBMR technology development plan has the potential to build capacity in the higher order skills sets. The building of this capacity will be undertaken at universities and research and development institutions where the projects are centred within a network of expertise. While these projects are of strategic importance to the development and support of the PBMR technology, they also have the potential to provide the mechanism to attract young professionals to the industry and in this way act as attraction and retention strategies for people to follow careers within the nuclear industry.
SUSPENSION OF MANUFACTURING ACTIVITIES
A setback during the year was an instruction by the National Nuclear Regulator (NNR) to Eskom (the licensing applicant) that manufacturing activities should be suspended. The NNR felt that not all the processes and documentation to adequately oversee the manufacturing activities of components at some of PBMR’s suppliers were in place.
PBMR subsequently notified its suppliers to suspend manufacturing activities. The shortcomings were identified very early in the procurement and manufacturing cycle, demonstrating the robustness of the regulatory process. Since the suspension, Eskom and PBMR have sought to align the process to the requirements of the NNR and fully support the NNR in its vital regulatory role.
THE WAY FORWARD
With the project being fully launched, PBMR now enters the most exciting phase of the project which, as a priority, includes the final preparation for hardware delivery, construction and commissioning of the demonstration power plant (DPP). In parallel, and of similar importance, the pilot fuel plant (PFP) design ought to be finalised for construction in order to manufacture fuel for a planned fuel load of the reactor core in 2013. Commercialisation of the technology and the launch of production units will follow once the technology has been proven with the demonstration plant.
The PBMR project also has enormous potential to improve the standard of living of the people of Africa, most of whom are deprived of electricity, and help them become active participants in the African Renaissance and Nepad.
ACKNOWLEDGEMENTS
I wish to thank the PBMR Board of Directors for their support and guidance during the year. My thanks also to my executive committee and all PBMR employees for their efforts to ensure that PBMR remains at the cutting edge of nuclear technology. I am confident that we have built a team that is equipped with the necessary skills, potential and experience to bring the world’s first Generation IV technology to the market.
We are living in challenging, but exciting times and right now, PBMR must be one of the best places to be in South Africa.
Jaco Kriek
Chief Executive
