Coal rescue plan for Eskom

Confined emergency procurement tender has received the National Treasury’s approval

ESKOM has assured Parliament that there will be no load shedding and its application for a confined tender to procure emergency coal has been approved by the National Treasury.

Eskom this week admitted that seven of its power stations were experiencing low levels of coal stockpiles. These include Hendrina, Komati, Majuba, Kriel, Arnot and Camden. As a result of the coal shortages, Eskom was diverting coal from other power stations to the under-serviced power stations.

Acting group executive for transmission, Willie Majola, said the application for confined coal procurement had taken longer than Eskom wanted, but the Treasury had given the green light and the tenders had undergone Eskom processes.

“Some of those contracts have started delivery, but some have to sort out black economic empowerment certificates,” said Majola. He did not name the supplying companies.

Coal was now being moved around the power stations so that it would be at the right levels. Majola said Eskom would move coal in Mpumalanga using more trucks. He said the power utility had found itself with capex constraints, because it had prioritised the build programmes at Medupi and Kusile.

“And because of the capex constraints, we did not invest enough on the cost-plus mines. The situation is made worse by Tegeta Exploration and Resources, because it is going into business rescue and it is supplying three stations,” said Majola. “Realising the situation of the cost-plus mines we approached the National Treasury for a confined procurement,” he said.

Majola said Tegeta was supplying Hendrina, Komati and Majuba.

Eskom also revealed that Tegeta was given a prepayment of R7 million last September, but the coal was not delivered. This was meant to be 37 kilotons for the Hendrina power station. Eskom said it was taking action against employees involved.

Majola said the Tegeta prepayment was discovered recently.

“They were paid R7m for coal that was not delivered. The payment that was done was not in line with Eskom policy and suspensions have taken place. There is a forensic investigation,” said Majola.

Despite repeated calls for assurances from MPs, the power utility said there was no need to press panic buttons and there would be sufficient coal supply for winter.

Group executive for generation, Thava Govender, said it would be disingenuous of him to say there would be no load shedding.

However, load shedding was caused by various factors.

“What I can give comfort to members of Parliament is that we don’t have load shedding.

“Some of the comfort I can give to members is that in winter you don’t have load shedding. I can give the assurance that every person employed at Eskom will ensure that we don’t get to that stage (of load shedding),” said Govender.