Focus for 2008

The main focus of the year ahead is on securing the important regulatory approvals that are required to authorise the start of construction and to reactivate the manufacturing of major components for the DPP. There are two major regulatory approvals which PBMR needs to obtain in the next two years:

Approval of the construction licence from NNR for the DPP.
Receiving a Record of Decision (RoD) on the Environmental Impact Assessment (EIA) to proceed with site and construction activities at Koeberg.

Furthermore, PBMR would be focusing on:

SIGNING THE SHAREHOLDERS SUBSCRIPTION AGREEMENT

Although PBMR is a 100%-owned subsidiary of Eskom, the Company forms part of an international cooperation agreement that currently exists between Eskom, the Industrial Development Corporation of South Africa Limited (IDC), Westinghouse Electric Company LLC (WEC) and the Government of the Republic of South Africa through its Department of Public Enterprises (DPE). These investors have been negotiating a Shareholders Subscription Agreement whereby all investors will take up shares in the Company relative to their respective contributions. Government will hold a golden share in PBMR to protect its national interest.

SIGNING THE ESKOM SALES CONTRACT

A sales agreement between PBMR and Eskom needs to be
concluded for the DPP at Koeberg.

ATTRACTING AND RETAINING SKILLS

The establishment of a nuclear academy is under consideration by PBMR and its partners, to recruit people into the industry and to train them to its standards and requirements.

MEETING SCHEDULE

PBMR management and employees are committed to meeting the target dates within budget and quality requirements, with the cooperation of the various parties involved.

GUARANTEES FOR PREMATURE DECOMMISSIONING AND NUCLEAR INDEMNITY

Guarantees for Premature Decommissioning and Nuclear Indemnity will be necessary before a contract with Eskom can be finalised or before manufacturing can commence. In the unlikely event of premature decommissioning, the government will have to guarantee any shortfall not recoverable from PBMR or the subcontractors after taking into account the balance of the end of life decommissioning fund.

The National Nuclear Regulator Act 47 of 1999 makes the holder of a nuclear installation licence strictly liable for all nuclear damage, and requires the holder of a nuclear installation licence to put up security in an amount determined by the Minister of Minerals and Energy in consultation with the Minister of Finance. Given the current plans for nuclear build in South Africa, a holistic solution will need to be found through consultations between the departments of Public Enterprises and Minerals and Energy, as well as the National Treasury, Eskom and PBMR.

Executive management’s goal for 2008 is to further strengthen the safety culture and communication at all levels; to maintain the schedule to first concrete at Pelindaba and Koeberg; to ensure that everyone at PBMR is motivated, focused and has a sense of purpose and achievement; and to create a working environment of zero confusion.