Molefe on Eskom coal deals probe: We have nothing to hide

Cape Town – Eskom CEO Brian Molefe said while he was surprised with Treasury’s investigation of its coal supply contracts, the power utility will cooperate, he said on Monday.

“The alleged mooted investigation on the coal contracts comes as a surprise to Eskom because the company is still waiting for a final report from the National Treasury on the probe that was conducted last year on the same matter,” Molefe said in a statement.

“We are still awaiting the outcome of the National Treasury’s probe,” he said. “However, if they require any additional information from us, we will oblige because we have nothing to hide.”

“We will await a formal request for information from the National Treasury, and we shall cooperate with the department as we have done before,” Eskom said.

This follows a report in the Sunday Times, which said Finance Minister Pravin Gordhan “…will direct the National Treasury to scrutinise all coal-supply contracts awarded by Eskom.”

The report quoted an unidentified senior Treasury source who said: “We are going to look at every contract there; especially those where the parastatal did not follow proper procurement processes.”

Eskom’s coal contracts have been in the news recently, after Glencore announced the sale of its Optimum coal mine to Tegeta Exploration and Resources, which is owned by the Gupta family and President Jacob Zuma’s son Duduzane. If the deal passes the Competition Tribunal, Tegeta will supply coal to three Eskom power plants: Hendrina, Komati and Majuba.

The Guptas are increasingly making headlines due to deals that are linked to President Jacob Zuma’s son Duduzane and their perceived influence over the president.

The recent headlines include its arms contract with state-owned company Denel, influence over cabinet appointees Mosebenzi Zwane (mines minister) and Des van Rooyen (Finance and Cogta), its sponsorship of the SABC breakfast show and recent coal deals.

It was reported this weekend that Gordhan would not partake in the New Age Breakfast show on SABC after his budget speech this Thursday. The New Age is a newspaper owned by the Guptas, which does not share its circulation publicly, but is circulated in government departments and state-owned entities.

Molefe's surprise comes as Eskom has already started this process with Treasury, Eskom said.

It submitted contracts to Treasury for coal and diesel including a register of payments made to various suppliers in 2015 after a request from the department on 25 June 2015, Eskom said.

It said Treasury visited Eskom’s head office on 23 July 2015 to clarify certain information they needed, and to also get additional documents which could not be sent electronically because of their size.

Treasury’s last request for additional information from Eskom was on 21 October 2015, which was duly submitted, said Eskom.

Eskom said it has demonstrated a serious commitment to deal with corruption and maladministration issues.

“If any loopholes are identified, they will be closed. If corrupt activities are found, by Eskom staff or contractors, we will take appropriate action, including criminal prosecution if it is warranted.”

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