Eskom defends coal contract

ESKOM CEO Brian Molefe has spoken out about the parastatal’s very public and potentially damaging spat with the National Treasury for the first time.

He said that while he respected Finance Minister Pravin Gordhan, Eskom had done no wrong in awarding a coal contract to a Gupta-owned company.

MPs in parliament yesterday grilled Molefe and Eskom’s board chairman Professor Ben Ngubane about the “herd of elephants in the room” – the tensions between Treasury, Eskom and the Department of Public Enterprises regarding the coal supply contracts of Tegeta, a Gupta-owned enterprise.

The Treasury said on Monday that Eskom had been attempting to block an investigation into its coal contracts and had not provided it with information requested several months ago.

The company was awarded a contract to supply coal to Eskom for which the company made large upfront payments.

Questions had also been raised about the quality of the coal supplied.

But Molefe, in parliament to present Eskom’s annual report, told the committee there had been no move to block the information.

Rather, he said, the information had required the sign-off of the board, which was only due to meet again in September.

But he said, the information had been delivered to the National Treasury yesterday after Minister Lynn Brown intervened.

On the issue of the contract, Molefe told the committee it seemed as if the objection “is not the substance of the transaction but that we should not have done business with them at all”.

He said the issue of the substandard coal had no basis as the coal, marked as sub-standard by employees who had since been suspended, had been given the all-clear by the South African Bureau of Standards.

The committee heard that the upfront payment had been made because at the time that Eskom was urgently looking for coal, the company indicated it would have to open a new coal seam in order to supply it, and would need an upfront payment.