Citizen Reporter
2 minute read
10 Apr 2017
12:19 pm

Molefe ‘withheld’ crucial report on Gupta coal deal

Citizen Reporter

A PwC report commissioned by Eskom reportedly found Gupta-owned Tegeta failed to meet monthly supply targets – info the utility kept to itself.

Brian Molefe. Picture: ANA

Former Eskom CEO Brian Molefe reportedly withheld crucial information from National Treasury and parliament about the Gupta family’s coal contracts with the power utility for almost a year, the Sunday Times reported at the weekend.

According to the report, Molefe and Eskom board chairman Ben Ngubane kept the information from a PwC report that flagged several breaches in the Gupta-owned, Tegeta Exploration and Resources’ R4 billion coal supply contract with Eskom.

The report was made available to the power producer in November 2015 after it hired PwC as part of strengthening its contracting capacity.

Among its findings, the report highlighted that Tegeta failed to meet the prerequisites for it to be awarded the 10-year (2015-2025) coal supply contract:

  • Eskom didn’t undergo crucial combustion tests on Tegeta’s coal;
  • The contract was signed even though Tegeta’s mining licence at its Brakfontein Colliery was valid only until 2020; and
  • Tegeta repeatedly failed to meet monthly supply targets.

But Molefe and Ngubane informed MPs last September after more than 10 months that Eskom was satisfied with all contracts entered into with Tegeta.

Molefe also gave assurances to Treasury’s director general Lungisa Fuzile that it took the necessary steps against suppliers who breach their coal supply agreements. He has previously consistently denied favouring the Gupta family over other coal suppliers.

Eskom has also defended withholding the PwC report from Treasury and parliament, saying it was an internal document and there was no obligation for it to share it with the two institutions.

The Tegeta coal deal is part of Treasury’s probe into contracts awarded to the family and its business associates which form part of former public protector Thuli Madonsela’s State of Capture report.

A spokesperson for Treasury told the Sunday Times the investigation had been completed and the report was with stakeholders for final comments.


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