The deal among Shaw Group Inc, South African nuclear techology firm PBMR Pty Ltd and engineering company Murray and Roberts was announced Monday, enabling South Africa to build a trial plant with pebble bed modular reactor (PBMR) techology.

This uses tennis-sized balls of uranium instead of the rods used in conventional nuclear plants. Proponents of PBMRs say that "uranium pebble" cores are proof against meltdown and that the small size of the plants suits remote and rural areas.

PBMR Pty Ltd, which is testing the technology before marketing it, also declares that such plants are cost-efficient, while the plant would emit no environmentally damaging greenhouse gases and be radiologically safe.

A PBMR spokesman Tuesday said the aim was to develop the test plant in 2003, but could not be more specific on construction plans.

The "preferred site" was Koeberg outside Cape Town, but "we're still doing feasibility studies and environmental impact assessment," PBMR Communications Manager Tom Ferreira told AFP.

Koeberg is the location of South Africa's only nuclear power plant, operating two conventional PWR reactors in a country largely dependent on coal and oil.

Environmentalists question the appropriateness of the new technology as well as the nuclear waste risks.

"The most appalling part of the strategy is that they're going to develop this in rural areas, remote from scrutiny, and could bury the stuff on site," Davin Chown of community-based action group Earthlife Africa said Tuesday.

Shaw said its subsidiary Stone and Webster will assist PBMR Pty Ltd and its investors -- local power giant Eskom, British Nuclear Fuels Plc, the Industrial Development Corporation of South Africa and the giant US utility Exelon.

"With our vast expertise in the nuclear generation industry we will believe that we will be able to provide an unparalleled level of technical expertise," Shaw's Chief Executive Officer J.M. Bernhard said Monday.

Anti-nuclear activists asked why the United States sought to develop the technology in South Africa, rather than in its "own back yard".

"We are dealing with unproven technology," Chown told AFP, saying that PBMRs had failed to meet required standards in the United States and Germany.

Defending the South African decision, Ferreira said: "Eskom started working on this in 1993 -- and it was really only Eskom. Then we got Exelon and British Nuclear Fuels as partners."

"We anticipate that ... PBMR will be able to bring the technology to the United States and other countries and build safe and economical operating nuclear power plants," PBMR chief executive David Nicholls said Monday.

Chown said Earthlife Africa had told the Pretoria government that if it "insists on this foolish path of investing in nuclear power, there should certainly be equivalent investment into renewables" such as wind, wave, solar, thermal and small-scale hydro-electric power.

Depending on the trial, Eskom has announced plans to acquire some 10 PBMR plants to provide power to coastal regions remote from the Gauteng coalfields in the north of South Africa.

In 1999, nuclear power accounted for 6.87 percent of South African electricity production. Almost 93 percent of the 187 billion kilowatts of energy supplies that year came from fossil fuels, according to government figures.

"Exelon is far more impatient than Eskom," Ferreira said. The large US utility "could buy around 40 plants before Eskom starts building theirs."

PBMR has invested 500 million rand (some 44 million dollars) in research and development, Ferreira said. "If we're not going to build it in South Africa, it's going to happen somewhere else."

China and Japan are also developing PBMR technology.

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