ASME NUCLEAR STANDARDS WORKSHOP SUPPORTS WESTINGHOUSE BID

UNCLAS SECTION 01 OF 02 PRETORIA 002401 SIPDIS SENSITIVE STATE PLEASE PASS USAID STATE PLEASE PASS USGS DEPT FOR AF/S, EEB/ESC AND CBA DOE FOR SPERL AND PERSON DOC FOR ITA/DIEMOND E.O. 12958: N/A TAGS: ENRG EPET EMIN EINV EIND ETRD SF SUBJECT: ASME NUCLEAR STANDARDS WORKSHOP SUPPORTS WESTINGHOUSE BID REF: Pretoria 440 ¶1. (SBU) SUMMARY: U.S. Embassy Pretoria supported the American Society of Mechanical Engineers (ASME) Nuclear Codes and Standards Workshop October 7-9 in Johannesburg, which successfully promoted Westinghouse's bid for significant new nuclear build in South Africa. State power utility Eskom and the SAG have postponed a decision on new nuclear build given technical, financial, and political challenges. Eskom says the decision will still be made in 2008, but further delay until after April/May 2009 elections is possible. END SUMMARY. -------------- ASME Nuclear Standards Gig -------------- ¶2. (SBU) The ASME (American Society of Mechanical Engineers) Nuclear Codes and Standards workshop took place in Johannesburg October 7-9. The official purpose of the workshop was to explain and promote ASME standards as a means for potential South African nuclear industry suppliers to join the global supply chain. The workshop was over-subscribed with over 400 delegates attending, with little reduction in attendance over the two days of meetings. The third day was a field trip to Columbus Stainless Steel (septel). Many areas of the mission contributed to making this a successful event, thereby realizing the original vision promoted by the Commercial Service of South Africa (CCSA). The Commercial and Economic Counselors and much of their staff attended most of the workshop. ¶3. (SBU) The ASME workshop was hosted by the South African Industrial Development Corporation. The Nuclear Industry Association of South Africa (NIASA) was involved in the planning and many of the delegates came from its ranks. The co-lead sponsors were Westinghouse and Areva of France, representing the two bidders on new nuclear build in South Africa for state power utility Eskom. Westinghouse's bidding partner and local construction firm Murray & Roberts, Pebble Bed Modular Reactor (PBMR),Steinmuller, and TUVRheinland were also sponsors. ASME Vice President Bryan Erler, Nuclear Regulatory Commission Office of New Reactors Director of Engineering Michael Mayfield, and Nuclear Energy Corporation of South Africa (NECSA) General Manager Van Zyl de Villiers were among the opening speakers at the workshop, stressing the opportunities presented by the renewed global interest in nuclear power. Eskom sent a significant number of participants who asked many questions during the sessions. -------------- Westinghouse Advocacy -------------- ¶4. (SBU) The unofficial purpose of the workshop was to support Westinghouse's bid as a global supplier committed to localization in South Africa and the ASME standard in its global supply chain, although ASME was technically neutral on the bidding competition. Areva uses its own standard, RCC-M, although it will have to use ASME if it is successful in winning new nuclear build in the U.S. In principle, South Africa could utilize ASME with either supplier. The locally developed PBMR utilizes ASME and Westinghouse is a shareholder in PBMR. Westinghouse and ASME were both very pleased with the event and thanked the mission for its support. Areva had a Qwith the event and thanked the mission for its support. Areva had a lower key presence, but at the last moment filled one speaker slot and made a makeshift booth. Areva's local CEO and his assistant, who failed to pre-register, were in the audience wearing a hastily written name-tag. ¶5. (SBU) ASME representatives visiting South Africa for the event held a number of side meetings with various South African officials, including the nuclear project decision makers at Eskom. In a two-hour meeting at Eskom headquarters, ASME officials argued that Eskom could and should utilize ASME standards as a universal and impartial reference for their engineering decisions. The ASME officials also invited Eskom officials to join ASME standards-setting decision-making fora and other nuclear related committees. Over the course of the two-hour meeting, ASME convinced Eskom that ASME could be a useful partner as South Africa's nuclear roll-out is planned and implemented. PRETORIA 00002401 002 OF 002 ¶6. (SBU) ASME officials also visited the Nuclear Energy Corporation of South Africa's (NECSA) Nuclear Training Center north of Pretoria. At this location, ASME had an opportunity to review South Africa's premier training facility for nuclear power. ASME and NECSA then initiated a discussion on the possible use of ASME training materials and protocols to assist South Africa in its training and human capital development. NECSA seemed particularly interested in using ASME training materials associated with welding, pipefitting, instrumentation and other generic skills. If ASME and NECSA were to reach agreement on training facilitation, U.S. manufacturers would benefit from greater local familiarity with U.S. standards, equipment and procedures in the nuclear field. -------------- Eskom's Decision Delayed -------------- ¶7. (SBU) Eskom's decision on a preferred bidder for an initial tranche of 3,000 MW and a full fleet of 20,000 MW was delayed from April to September 2008. Industry sources indicate that Eskom has since requested a further delay in the decision to at least the end of the year and Eskom officials continue to publicly state that a decision will occur this year. Eskom had already faced challenges in financing its massive new build program to begin to alleviate energy supply shortfalls. Now, political change in South Africa and global turmoil in financial markets have heightened the challenge of obtaining the necessary financing and choosing the supplier. South Africa's interim government will remain in place until elections expected in April/May 2009. Some observers expect that it would be difficult for the interim government to make such an important decision. The local Westinghouse representative assigns slight probability for a decision before the end of this year and notes that slippage to early 2009 could generate further slippage to after the April/May elections. ¶8. (SBU) COMMENT: Embassy wishes to acknowledge the Commercial Counselor's year-long effort to make the ASME event happen. The ASME workshop highlighted the importance of using ASME standards for South Africa's budding nuclear industry. This demonstrated to Eskom and the SAG the value of awarding the contract to Westinghouse, rather than Areva which uses its own in-house standard. LALIME