Motsepe rejects Eskom benefit claim
Tycoon says his firms do not depend on state
Billionaire Patrice Motsepe has flatly denied that one of his companies was creaming it from a deal troubled stateowned electricity company Eskom has with renewable energy corporations. The mining magnate, who happens to be brother-in-law to both President Cyril Ramaphosa and energy minister Jeff Radebe, totally rejected claims from unions and left-leaning opposition parties that government’s plans to restructure Eskom were meant to benefit him and his companies.
Since Ramaphosa announced two weeks ago that Eskom would be split into three different businesses under a holding company, left-leaning unions and political parties have been accusing the president of planning to “privatise” the power utility. They also claimed that the government was refusing to do away with an agreement it signed with Independent Power Producers (IPPs) even though it was costly for Eskom because Motsepe and other politically connected players stood to benefit.
But Motsepe yesterday denied this, saying his businesses and family have never benefited from their proximity to government. The Mamelodi Sundowns owner is involved in the energy sector through the African Rainbow and Power (Arep), which has stakes in the IPPs.
“We did not acquire a single, not one, of the project because of government,” Motsepe said at a press conference in Sandton. Motsepe, who is one of the richest South Africans, largely made his money by investing in the mining sector in the late 1990s. His businesses have since grown to include financial services and the energy sector.
Although he has always been seen to be close to the political establishment, he has always avoided sectors that depended on state contracts for business. However, the ascendency of Ramaphosa, who is married to Motsepe’s older sister Tshepo, and the appointment of Radebe, who is married to the other sister Bridget, as energy minister, has fuelled claims of “policy capture” by the family of the country’s energy sector. The claims gained credence in some circles last year when Radebe signed deals with several IPPs and then refused to make public details of such a deal. Motsepe said there was a justified “perception” of conflict of interest. “When we first heard [the allegation] we said we have a perception issue here. We engaged with some of our advisors as to how do we deal with this issue. Our duty is not just to be as transparent and as accountable but also to state what the truth and the facts are,” Motsepe said. But despite the perception of conflict of interest, Motsepe said Arep could not simply pull out of the deals as it had contractual obligations.
EFF spokesperson Mbuyiseni Ndlozi insisted that the IPPs were only there to benefit Ramaphosa’s relatives.
“The claim has always been that the business interest of Motsepe are part of white people benefiting from IPPs. How could a business model that basically bankrupts an already financially stressed [power utility] be kept by Eskom?” Ndlozi added: “How could Eskom buy electricity at an expensive price resulting in huge losses? How could they continue to do that? They [IPPs] continue to be pushed regardless of the fact that they are unreasonable.”