Treasury taking a long, hard look at coal contracts

The National Treasury has confirmed to the standing committee on public accounts (Scopa) that it was compiling a report on coal contracts between Eskom and a Gupta-owned firm, Tegeta. The Treasury told Scopa yesterday it had resolved its dispute with Eskom after the latter supplied the information required for the coal contracts with Tegeta. Acting chief procurement officer Solly Tshitangano said they were still looking into the contracts of the Passenger Rail Agency of South Africa (Prasa) and Transnet. All these investigations are for contracts that are worth hundreds of millions of rand and were ordered by the Public Protector. The report by the acting chief procurement officer comes as Denel, Eskom and the National Treasury were to appear before the portfolio committee on public enterprises today.

This followed the decision of the committee last week that all three entities must appear before it. The state-owned entities (SOEs) have been in conflict with Finance Minister Pravin Gordhan over a number of issues. But investment firms Futuregrowth and Jyske Bank of Denmark last week pulled the plug on SOEs. The firms said they would no longer provide loans to some South African SOEs because of infighting and political uncertainty. MPs had called for the joint meeting after Eskom refused to hand over the required documents to the Treasury for the coal contracts with Tegeta. The Treasury was dismissive of claims by Eskom that it was co-operating with it on the coal contracts with the Guptas. But in the Scopa meeting yesterday, Tshitangano said the Treasury was reviewing all the contracts above R10 million. This included the contracts of Eskom, Prasa and Transnet.

The investigations were based on the instruction of the Public Protector. Tshitangano said some of the contracts at Prasa involved R10m and others as much as R600m. The Treasury was investigating more than 200 contracts at Prasa. He said the Treasury had hired 13 firms to help with the forensic investigations into the contracts at the three entities. They would give the report to the Public Protector once the Eskom investigation had been completed. The same would happen with other SOEs investigated by the Treasury, said Tshitangano. He also told Scopa that at Transnet, they were investigating consulting contracts. He did not disclose the value of these contracts. “The trend we see with the public entities, they call it confinement – where they appoint companies without competitive bidding,” said Tshitangano. “You find the tender was R500m, but it is extended endlessly and is now R1.5 billion,” he said. He also said that at Eskom, they were looking into the Tegeta contracts for coal.