French parastatal Areva appears to have tried to buy its way to the front of the queue to build nuclear power stations in SA - a miscalculation.

A frontrunner in the race to build new nuclear power stations in South Africa conducted a costly schmooze campaign during an earlier round of bidding, the Mail & Guardian can reveal.

As the government prepares to reopen bidding for the building of  a fleet of nuclear power stations, an investigation of the withdrawn 2008 tender, known as Nuclear 1, suggests that the frontrunner, then and now, French nuclear parastatal Areva, tried to manipulate the process by buying political favour.

The M&G reported in February that Areva was teaming up with a Chinese partner to form a politically favourable consortium.

The new contract, which could be put out to tender later this year, will be worth up to R1-trillion, the biggest in South African history.

Areva's rival, the United States company Westinghouse, hinted this week that it, too, was reviewing its strategic alliances by initiating "a consultation process with staff to possibly restructure its operations … in anticipation of nuclear new-build in the near future".

Areva's attempts to cosy up to a politically connected elite to win the 2008 nuclear tender were ultimately unsuccessful, but it shows how much bidders are prepared to invest to make these connections.

In 2008, Areva's strategy included a takeover of the politically connected uranium mining company UraMin to secure uranium rights in the Karoo, Namibia and the Central African Republic.

Rumours have circulated for years that the French company paid too much for UraMin to gratify former president Thabo Mbeki's allies, at least partly because it believed it would help it to win the huge South African nuclear contract.

But when the ANC sacked Mbeki in September 2008, Eskom withdrew the Nuclear 1 tender. The parastatal later said it could not afford the deal, but the timing suggested the events were linked. It has been speculated that the Jacob Zuma faction, in control of the ANC party machine since the Polokwane conference the previous December, did not want the Mbeki-led government to dispense the patronage from such a large contract.

The cancellation of the tender left Areva exposed to the full cost of buying UraMin, which it bought at the top of the uranium bull market for $2.5-billion. When the Fukushima nuclear disaster in Japan in March 2011 burst the uranium bubble, Areva announced gigantic losses, writing down its UraMin assets by more than $2-billion. This led to a French parliamentary investigation earlier this year of Areva's handling of the UraMin takeover, which found "some malfunctioning in the company's governance and decisional process", but no clear evidence of fraud.

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