Tegeta contracts above board, says Eskom

Eskom has come out in defence of the Guptas, saying the utility’s coal contracts with the family-owned Tegeta mine are above board.

Johannesburg - Eskom bosses yesterday came out in full defence of the Guptas, charging that the utility’s coal contracts with the family-owned Tegeta mine were above board.

Eskom also told the National Assembly’s public enterprises committee that it was co-operating with the National Treasury on its investigations into Eskom’s coal supply contracts, particularly those signed with the Gupta-owned Tegeta Resources.

Eskom board chairman Ben Ngubane and chief executive Brian Molefe told the committee that it had always been their desire to co-operate with the Treasury. They said they had sent the 172-page document to the Treasury - the centre of the dispute - and denied that they were favouring the controversial Gupta family in the coal contracts.

Eskom was appearing before MPs to answer on the Treasury claims that the utility was trying to block an inquiry into the contracts.

Molefe said the issue was about the Guptas being prevented from doing business with the state.

“The objection is not the substance of the transaction with Tegeta, the suggestion is that we should not have done the transaction with Tegeta at all,” Molefe told Parliament.

Frustrating

Earlier this week, the Treasury issued a statement accusing Eskom of frustrating its investigations by refusing to submit relevant documents on the contracts.

The Treasury said it was surprised by Tegeta's threats of a court action to block the release of the report on Eskom coal contracts.

“It is Treasury’s view that a company or entity that is doing business with government and has nothing to hide should be transparent and welcome reviews of its dealings with the state,” the Treasury said at the time. “Members of the public also deserve to know how public finances are spent. It should, therefore, concern all South Africans that there are efforts to block and undermine the reviews.”

Molefe defended Tegeta yesterday, arguing that it was not supplying sub-standard coal to Eskom.

He said he could not find anything in the law that could prohibit them from doing business with the Gupta-owned companies unless they were blacklisted by the Treasury.

All of this sounded like a kangaroo court, he charged.

Molefe said the Guptas had not been found guilty of any crime, and Eskom would not preclude them in doing business. “Until we get a reason to blacklist them I’m afraid if they apply for a transaction we’ll have to consider them.”

Chief financial officer Anoj Singh said there was nothing wrong or untoward with the advanced payment of R578m made to Tegeta as this was standard procedure done with big companies in the past.

Deviation

Ngubane said the pre-payment was done because of the acute situation when there was a shortage of coal during the winter period and Eskom needed it urgently.

Molefe said the Treasury had just issued an instruction deviation since the debacle broke.

He denied that he was favouring the Guptas or had been captured by them as some had claimed.

“The Treasury issued instructions that any deviations from existing contracts have to be approved by the National Treasury from July 1,” Molefe said.

“One of the first deviations was Koornfontein mine in Komati owned by Tegeta, which is owned by the Guptas.

“The Treasury itself approved deviation for Koornfontein on August 17. Perhaps the Treasury has been captured by the Guptas.”

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