Eskom’s Coal Contract: Do You Know SA Has Lost Half A Billion To It?


Angered by the prolonged probe into Eskom’s coal contract, the power utility board chairperson Ben Ngubane slammed the SA Treasury saying it’s wasting taxpayer’s money.

The Eskom Chair who earlier warned of a possible power shutout similar to what was experienced in 2008, slammed the Treasury for wasting more than half a billion rand in savings, while it probes Eskom’s coal contract.

Ben Ngubane told the parliament’s Standing Committee on Public Accounts (Scopa) that further delays in signing new contracts could further plunge the country into darkness.

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The Treasury have been at war with the power utility over claims that it has been uncooperative in supplying documents to support a Treasury review of its controversial coal contracts.

Treasury also said it only caught sight of Eskom’s 2016 PricewaterhouseCoopers report this year, and that the power utility commissioned the audits in 2015, knowing that Treasury had already begun doing the same.

“Overtly if we were able to calculate it, I would say it is a fruitless and wasteful expenditure that we must recover from Eskom.” said the Treasury’s Solly Tshitangano

“Business implications of implementing the National Treasury directives on Eskom and electricity, we have lost R513.25 million in negotiated savings. They were lost to Kusile because of National Treasury.”

The Standing Committee will now be compiling a report to Parliament on its recommendations of the issues of non-compliance.

Despite  Treasury and private audits pointing out that the Gupta company was awarded the controversial Eskom’s coal contract at a time when the mine was not even fully operational.

Tegeta was reportedly awarded the 10-year R4 billion contract in 2015 without meeting a host of Eskom’s supply chain management regulations.

Both Eskom chief executive Brian Molefe and Ben Ngubane insist the Guptas’s Tegeta mine has not received any preferential treatment from the power utility.

Eskom CEO Brian Molefe said during his first appearance before the SCOPA that Eskom recognised its failures in complying with procurement regulations and hence it commissioned audits by PricewaterhouseCoopers.

He added that the current board has changed its approach to coal procurement but insisted that he only joined Eskom after the Tegeta deal was concluded and so he could not be accused of giving the company preferential treatment.

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The company will take responsibility for flouting procurement processes, Molefe said, the contract was temporarily suspended last year when issues of coal quality were raised, he added.

The Tegeta deal was negotiated over two years and not a rushed deal as suggested by the PwC report.

Ben Ngubane says the South African Treasury wasted taxpayers money worth half a billion in its effort to probe the Eskom’s coal contract.