Eskom after ‘dud’ coal supplier

Eskom is demanding R6.2 billion from Mpumalanga “billionaire pastor and coal baron” Ramesh Joe Singh after his firm, Just Coal, allegedly supplied the utility’s Tutuka Power Station with sub-optimal coal worth R5.8 billion.

The poor-quality coal is claimed to have put the operations of the power station at risk.

Eskom has since cancelled the contract with Just Coal and has approached National Treasury “to jointly agree on suitable alternative mechanisms to source coal”, the power utility has said in a written reply to questions posed.

“The contract has been cancelled as a result of breach of the said agreement by Just Coal. Eskom has reserved its right to claim damages arising from such breach.”

Eskom said it was awaiting for the outcome of an assessment of the damage the coal Just Coal supposedly caused.

Eskom has previously penalised Joe Singh Group – which comprises Just Coal, Ferret Coal Kendell, Fentonia Colliery – five times for similar transgressions in 2016. The group paid fines totalling R9.65 million to the power utility.

“The transgressions were in relation to coal stockpiles of approximately 5 000 tons each, which did not meet the contract coal quality specification,” Eskom said. “Consequently, [we] applied contractual remedies.”

Joe Singh Group’s three subsidiaries allegedly all have contracts with Eskom, but the power utility has denied this: “Eskom had a contract with Just Coal,” it said.

“Regarding the entities of Joe Singh Group of companies, that is a matter that can be directed to other state institutions such as the companies and intellectual property commission.”

Eskom has also laid criminal charges against Singh and his CEO Peet Erasmus. “The [matter] is currently under investigation by the South African Police Service,” Eskom said.

The Saps commercial crimes unit was handling the case but the investigating officer responsible for the case could not be reached for comment.

Erasmus and Singh declined to comment on the matter.

“Thank you for the enquiry, our comment is simply that both matters are sub-judice,” Just Coal said in response to an e-mail enquiry.

The Eskom contract with Just Coal has been in place since March 2014.

Interim Eskom CEO Matshelsa Koko recently berated Just Coal for allegedly supplying the power utility with poor-quality coal. “This is in breach of its contractual obligations,” he said.

“The result is that Eskom is burning an unknown combustion characteristic coal resource at its Tutuka power station, potentially resulting in load losses.

“Coal has been diverted from other power stations to ensure that coal is available for Tutuka Power Station”, since the cancellation of the contract. – ANA