Pravin takes on Eskom, Guptas
Utility accused of resisting
THE Finance Ministry yesterday accused Eskom chief executive Brian Molefe of failing to comply with requests for information about its coal contract with the Gupta-owned mining company, Tegeta Resources.
Eskom responded soon after with a furious denial, saying it was shocked at National Treasury’s statement as it had duly complied except in one instance, where it believed it was set an unrealistic deadline.
In a frank missive, National Treasury said it had since April repeatedly tried to get information from Eskom relating to Tegeta Resources, including about money advanced to the company, but was met with “resistance”.
Its unmet demands included a request for a list of payments to Tegeta Resources and invoices received from the company between September and the end of April.
Treasury said Lungisa Fuzile subsequently wrote to Eskom to ask it to withdraw its insistence that “all the Tegeta coal contracts with Eskom have been extensively audited by various agencies, including National Treasury”, while clearly that was not the case. Furthermore, it said, Finance Minister Pravin Gordhan then took the matter to Eskom’s chairman, Ben Ngubane, and raised concerns about advance payments made to Tegeta Resources and the failure to submit the information as requested.
“To date, not only has Eskom failed to honour its undertaking to submit comments to Treasury’s report, but it has chosen to ignore correspondence and put all forms of hindrances,” the Treasury said.
National Treasury’s chief procurement officer Kenneth Brown has been investigating contracts worth more than R10 billion in a bid to clamp down on corruption.
The statement comes after the perceived tug-of-war between Gordhan and President Jacob Zuma for control of state-owned entities escalated with the Directorate for Priority Crime Investigation (Hawks) closing in on the minister in its probe into the intelligence gathering unit at Sars and Cabinet agreeing to set up a council that will give Zuma direct control over parastatals.
The Tegeta Resources contract has been making headlines for months. It emerged in June that Eskom had, despite initial denials, paid Tegeta Resources in advance for coal.
Last week, documents were leaked which showed the company threatening to interdict National Treasury should it release the report emanating from its investigation to the DA, which had requested it in terms of the Promotion of Access to Information Act.
At the weekend, the Sunday Times wrote that the report revealed that Eskom had paid Tegeta Resources more than R130 million for sub-standard coal. The same newspaper quoted the minister as telling Treasury staff last week that he was prepared to lay down his life to fight state corruption.
Eskom yesterday said it was “shocked and perplexed” that National Treasury had opted to issue the statement it had.
“Eskom wants to reiterate that it has been co-operating with National Treasury.”
The utility added that it objected when on April 12 this year it was asked to comment on a 172-page report from Treasury because the deadline was not realistic. It then asked for an extension, which was granted, it said. “We therefore think it is neither unreasonable that our board will have considered responses to the 172-page document by end of September 2016, nor a reason for National Treasury to label Eskom as uncooperative.
“Furthermore, in a letter from Mr Molefe to Mr Brown dated June 24, 2016 Mr Molefe informed National Treasury of Eskom’s intention to submit the required information after it has been reviewed by the Eskom Board, as per National Treasury instruction of April 12, 2016.”
The DA described the extraordinary exchange between the Finance Ministry and Eskom as Gordhan raising a “bazooka” at Molefe.
THE SAGA around the National Treasury’s investigation into Eskom’s coal contracts took another turn yesterday when the Treasury accused Eskom of resisting its probe into contracts with Gupta familyowned Tegeta Exploration and Resources.
The Treasury said yesterday that it had “noted with concern” Eskom’s claims that it had 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,” it said.
The department said it had made several attempts to get information from Eskom, including a request for a system-generated list of payments made to Tegeta and invoices received from Tegeta for the period September 1 last year to April 30 this year.
Hindrances “To date, not only has Eskom failed to honour its undertaking to submit comments to the Treasury’s report but (it has) chosen to ignore correspondence,” the Treasury said.
It accused Eskom of refusing to co-operate with the investigations into coal contracts given to Gupta-owned companies, dismissing Eskom’s claims over the weekend that it had been co-operating with it on the Tegeta contracts. It said the constitution required that public finances should be accounted for and no entity was exempt from this requirement.
Reports emerged last week that Tegeta was planning to take the Treasury to court to block the release of the report into the coal contracts.
The contracts are reportedly worth R400 million a year for a period of 10 years.
It is also true that the National Treasury has requested all contracts related to Tegeta.
The Treasury indirectly accused Eskom of spreading false information. It said National Treasury director-general Lungisa Fuzile had written to Eskom requesting that the utility withdraw a June 12 statement suggesting that “all the Tegeta coal contracts with Eskom have been extensively audited by various agencies, including National Treasury”.
Treasury said that was “clearly” not the case.
Eskom made the claims
amid reports that it had made a prepayment of R578m to Tegeta Exploration and Resources for coal. At the time, Eskom chairman Baldwin Ngubane defended the decision.
Treasury said yesterday that Finance Minister Pravin Gordhan had raised concerns about the advance payments with Ngubane. “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. 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,” the department said.
Eskom said yesterday that it stood by its assertion that it had been co-operating with the Treasury. The utility detailed a chronology of events since the end of July last year when the Treasury initiated its investigation. These include the Treasury’s requests for more information.
On April 12, the Treasury asked Eskom to comment on a 172-page document. “This request came with a specific instruction… to provide comments after they had been considered by the Eskom Board. The deadline given was 30 April 2016,” Eskom said.
Eskom said such a request was unreasonable and had asked for an extension to provide the information, which was granted by the Treasury. “We therefore think it is neither unreasonable that our board will have considered responses to the 172-page document by end of September 2016 nor a reason for National Treasury to label Eskom as uncooperative,” Eskom said.
Eskom said, in a letter from its chief executive, Brian Molefe to the Treasury’s chief procurement officer, Kenneth Brown, dated June 24, informed the Treasury of Eskom’s intention to submit the required information after it had been reviewed by the Eskom board, as per the Treasury’s instruction of April 12.
Eskom refused to retract the June 12 statement that the Treasury had reviewed the Tegeta contracts extensively. “It is also true that the National Treasury has requested all contracts related to Tegeta and that these contracts were subject to an investigation by National Treasury,” Eskom said.