Eskom boss defends the Guptas

Eskom chief executive Brian Molefe yesterday went on a limb and vociferously defended the Gupta family, whom he said had been subjected to a “kangaroo court”. Speaking at the release of the company’s annual results, Molefe took aim at several South African commercial banks that have closed the bank accounts of Oakbay Resources and other businesses owned by the Gupta family. Molefe stopped short of accusing the banks of double standards, charging that they did not take similar action against a group of construction companies found guilty of collusion. “They still have bank accounts,” he said, adding that the construction companies also rendered services to Eskom. In 2013, the Competition Commission fined 15 major construction firms R1.46 billion for collusive tendering. “I think Mr Malherbe still has a bank account despite being convicted of fraud,” Molefe said. He was referring to former Eskom senior manager, Dawid Malherbe, who was last month convicted of R65 million fraud.

He said it was dangerous to close the bank accounts without giving reasons for the action. “It is a dangerous culture. I have been to Limpopo where people were burnt alive because people were saying they were witches. I am interested in the reasons. Is it because they (the Guptas) landed in Waterkloof?” he said, referring to the 2013 incident in which the Gupta family used the Waterkloof air force base to land charter planes full of wedding guests. Eskom was recently accused of bending backwards to accommodate Gupta family-owned Tegeta Exploration and Resources. This was after it emerged that Eskom had prepaid Tegeta for the contract it secured to supply Eskom’s Arnot power station from Optimum coal mine. Responding to questions at the results presentation, Molefe said the deal with Tegeta was above board. He said Tegeta was among a group of seven companies supplying coal, on a short-term basis, to Eskom for Optimum and Arnot power stations. When some of the companies wanted to discontinue with the contracts in order to redirect their coal to designated power stations ahead of the winter peak demand, Tegeta and Umsimbithi Mining continued with the short-term supply.

Matshela Koko, Eskom’s group executive for generation, said Eskom wanted high quality coal and that Tegeta had coal which was of export quality, but needed money for capital expenditure to mine the coal. Koko said Eskom had agreed to the R580m pre-payment for 1.25 million tons of coal to be supplied by the end of this month. “They required the cash, but their bank account had been closed and they had just made payment to Glencore,” Koko said. As surely, Tegeta ceded its shares to Eskom. Meanwhile, Eskom yesterday expressed dissatisfaction with its coal supply contract with Anglo American for the Tutuka power station. Koko said Eskom was paying R1 600 per ton of coal. He described the price as “unacceptable”. Anglo supplies the coal from New Denmark coal mine, one of the deepest coal mines in South Africa. “It is a cost-plus mine and we will deal with it the way we dealt with Arnot. We paid Anglo R1 600 per ton, which is unacceptable. We will go to unconventional suppliers and we will not apologise about it. We have sufficient coal in the Highveld,” he said.

When Exxaro’s contract to supply Arnot power station ended in December, Eskom was paying R1 132 per ton. Eskom said it had refused Exxaro’s coal supply proposal of an increase in the price to R1 400 per ton.