Public Enterprises Minister Barbara Hogan explained that government had been forced to make the "painful" decision to reduce cash injections to State-owned enterprises, such as the Pebble Bed Modular Reactor (PBMR) programme, owing to the fact that government "no longer has pockets deep enough to fund it on the scale and length of time required".

The National Treasury indicated in February, that government's allocation to the PBMR Company would all but end, falling from the R1,74-billion in 2009/10, to R3,6-million this year 2010/11. Between 2006/7 and 2009/10, the country allocated R7,2-billion for the development of the demonstration and fuel plants to prove the PBMR technology, while it allocated a further R1,73-billion in 2009/10 for the programme.

Speaking in Parliament on Thursday, Hogan stressed that alternative funding mechanisms are being sought and that an Inter-Ministerial Committee will be making proposals to Cabinet in this regard in the coming months.

The fact that the PBMR Company had not secures an investor or a customer had precipitated the decision to reduce funding, but the intention was still to retain the company's critical skills, capabilities and intellectual property.

"There is no uncertainty about the soundness of the technology; in fact the PBMR has been nominated by the American government as a partner in its New Generation Nuclear Programme (NGNP) programme," Hogan noted.

US Secretary of Energy Steven Chu recently endorsed small modular nuclear reactors (SMRs) as "one of the most promising areas" in the future of civil nuclear energy, and on March 8, the US Department of Energy announced that it had awarded contracts worth $40-million to two consortia for the conceptual design and planning for the NGNP programme.

One consortium is headed by General Atomics, the other by Westinghouse Electric. South Africa's PBMR Company and M-Tech Industrial formed part of the Westinghouse consortium.

The PBMR Company could earn $10-million from the contract, which would be pursued despite the fact that the company would probably have to cut its some 800 staff complement by 75%, owing to the budget cuts.

The PBMR, she added, had played an indispensable role in shoring up and expanding nuclear research and design capabilities, which "can only stand us in good stead as we decide on our energy options going forward".