Molefe, Brown: Why the focus on Gupta-owned Tegeta?

(Gianluigi Guercia, AFP)
(Gianluigi Guercia, AFP)

Cape Town - Eskom boss Brian Molefe and Public Enterprises Minister Lynne Brown have criticised media reports insinuating that the Gupta-owned Tegeta Exploration and Resources benefited unduly from an Eskom contract.
 
“Eskom primarily sources 51% of its coal from four major key suppliers at a cost of R23bn of Eskom's total cost of coal of R45bn,” Brown said.
 
“We’re investigating coal purchasing in South Africa in general. There’s been a huge focus on the 1.8% of the coal Tegeta is providing, but why don’t we care about how the 51% is spent?”

Molefe was part of a delegation from the Department of Public Enterprises that briefed the media after Brown had given her budget speech in Parliament earlier.

Molefe said Eskom will no longer continue with the cost plus coal mines once these contracts have come to an end.
 
“We’re no longer interested in the cost plus mines," Molefe said. “We want to buy coal, but not finance mining activities. The companies must mine it and sell it to us.”
 
Molefe said Eskom is in the process of ascertaining which of the coal mines belong to government, following heavy state capital expenditure into these “assets” in the past. “Perhaps these assets could come onto Eskom’s balance sheet.”
 
His remarks came after Brown said during her budget vote that Eskom should be able to negotiate better coal prices, “but contrary to that, coal costs have been growing above inflation levels”.  
 
Molefe said that future coal suppliers would be determined based on the price of coal they offer. “There were hidden costs in the contracts with the cost plus mines and we need more transparency going forward.”

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