Koko’s Eskom coal tests shaky — Treasury

• Investigators say samples could have been switched • Guptas pocketed R1bn from utility

Coal samples that enabled the Gupta family to pocket more than R1bn could have been switched during a lab test ordered by former Eskom acting CEO Matshela Koko, Treasury investigators have found.

The contract was to supply Eskom’s Majuba power station from the Gupta-owned Brakfontein colliery, despite findings that its coal was substandard.

An explosive draft report commissioned by the Treasury into alleged looting of Transnet and Eskom by the Guptas raises several red flags about the coal quality test, conducted at a laboratory belonging to the SA Bureau of Standards (SABS) on August 29 2015.

The draft report, whose findings Koko disputes, concluded the Brakfontein contract, signed five months earlier in March 2015, was irregular because the officials responsible had ignored test reports that found the coal did not meet the Majuba plant’s specifications.

According to the report, Eskom’s head of primary energy Vusi Mboweni, who signed the contract, and his officials should be held accountable for R1.3bn in irregular expenditure.

The utility only stopped receiving coal from Brakfontein in February 2018, after the Guptas’ mining company Tegeta, which owned Brakfontein, was placed in business rescue.

Sources at Eskom told Business Day they were placed under extreme pressure to award Tegeta a sweetheart deal at Brakfontein mine in March 2015 worth R3.8bn.

Tegeta had been trying unsuccessfully since 2011 to secure a contract from Eskom.

The report points to several anomalies with Koko’s SABS test in August 2015, which he used to justify allowing Tegeta to keep supplying Majuba with coal from Brakfontein, even though it had repeatedly failed quality tests since the contract was signed five months earlier.

It found that no Eskom officials or monitors were present

when the samples were collected from the colliery and placed in sealed bags to be transported to the lab.

“There is no indication that the coal collected from Brakfontein came from the stockpile reflected in the sample labelling,” the draft report concludes. This “rendered the integrity of the process questionable”.

Tegeta employees also witnessed the testing at the lab without Eskom officials present, which violated SABS policy. Moreover, there was no explanation why this particular SABS test found the coal compliant, when dozens of previous tests had found it decidedly below par, the draft report found.

This suggested “the samples may have been switched” prior to collection.

Investigators also found the timing of Koko’s actions suspicious. He suspended Brakfontein on August 31 2015, even though he had already received the questionable SABS report approving the coal.

The next day he suspended coal scientist Mark van der Riet and other officials who had blown the whistle on the suspect test results, and on September 5 he reinstated Brakfontein without conducting another test in the interim.

ANOMALOUS RESULT

Asked this week about these interim findings, Koko, who quit the utility under a cloud in February, said he had played no role in any actions during testing that were flagged as suspicious and could not be held responsible for the anomalous result.

“I stand by the decision I have made for retesting,” he said, describing the draft report as “nonsensical” and riddled with “so many stupid errors”. He also claimed Eskom’s internal audit division had declared the coal delivered to Majuba compliant, although the utility declined to comment on this.

Asked to comment on the draft report’s findings, Mboweni referred questions to Eskom’s media desk, which said the Treasury-appointed investigators are “still awaiting comments on the draft report from the affected parties”.