Gloves off as Treasury takes swipe at Eskom


Cape Town – Eskom resisted efforts by Treasury to co-operate with the process of reviewing the power utility’s coal contracts, the ministry said in a statement on Monday.

“To date, not only has Eskom failed to honour its undertaking to submit comments to Treasury’s report, but it chose to ignore correspondence and put all forms of hindrances,” National Treasury said.

It was responding to Eskom’s statement on Sunday suggesting that it has been co-operating with the process of reviews of the coal contracts.

“The National Treasury would like to categorically state that its efforts have met resistance.”

This comes as Finance Minister Pravin Gordhan's mission to weed out corruption and keep a lid on state spending seems to be reaching a climax within the broader factional fight that is occurring in the ruling African National Congress.

Gordhan - who is apparently going to be charged by the NPA within the next two weeks, according to City Press, spoke to his staff on Friday about his mission to safeguard South Africa from criminals.

READ: NPA could charge Gordhan and co this week

Gordhan allegedly told his staff that the Guptas were attacking him because of the work the department was doing.

The coal contract review has been linked to the Gupta-owned Tegeta coal contracts. The Democratic Alliance said last week that the Guptas had threatened Treasury with legal action over the release of its report into these contracts. Days later, the Guptas announced they were selling all their shares in their South African business operations.

The Guptas - who believe they are victims - are being investigated by the Public Protector for what is termed "state capture".

READ: Zuma, Gordhan standoff: only one will survive

Treasury said on Monday that it was surprised by media reports of Tegeta “warning” and threatening to interdict the department should it release a report into its investigation of Eskom’s coal contracts.

How Treasury tried to work with Eskom

Regarding its attempts to engage with Eskom, Treasury said that since April it made several attempts to get information from Eskom including:

• Sending a report to Eskom CEO Brian Molefe and chairperson Ben Ngubane and a request for comment on it.

• Granting an extension that Eskom requested to provide the comments.

• A request for Eskom to submit a system generated list of payments made to Tegeta and invoices received from Tegeta for the period 1 September 2015 to 30 April 2016.

• A letter by National Treasury director general Lungisa Fuzile, requesting that Eskom withdraw its statement suggesting that “all the Tegeta coal contracts with Eskom have been extensively audited by various agencies, including National Treasury,” whilst clearly that was not the case.

“Minister Pravin Gordhan escalated the matter to … Ngubane, raising concerns about advance payments made to Tegeta and failure to submit the information requested in relation to the matter,” it said.

“To date, not only has Eskom failed to honour its undertaking to submit comments to Treasury’s report, but it chose to ignore correspondence and put all forms of hindrances.”

Eskom said in a statement on Sunday that it has repeatedly provided information to the National Treasury.

“Eskom continues to co-operate with the National Treasury on its investigations of the coal contracts,” it said. “Contrary to the allegations made by the Sunday Times today, the National Treasury has not issued any conclusive findings against Eskom on any of these contracts.”

“Eskom disputes that it has received out of specification coal worth more than R134m from Tegeta, and we have provided the documentation to that effect to the National Treasury.”

“In addition, the Department of Water and Sanitation issued Tegeta with a water use licence on 22 December 2014. The spurious allegations by the Sunday Times, which have are being continuously regurgitated, are therefore wholly incorrect, mischievous and misleading.”

Treasury called on all state owned entities to practise and respect the principles contained in the chapter of the Constitution on co-operative governance.

“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,” it said.

“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.”

Treasury is also doing battle with SAA over a R5bn guarantee it needs in order to table its 2015 annual financial results. Treasury apparently requires a board change – notably without the presence of chairperson Dudu Myeni – before it will approve the guarantee.

On Sunday, SAA placed an advert seeking a R16bn loan, a move the DA said revealed how severe it financial situation was.

WATCH: The implications if Gordhan is removed from office

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