DA to file PAIA into alleged Gupta family coal deals
19 April 2015
I will submit a Promotion of Access to Information Act (PAIA) application into all of Eskom’s coal supply service contracts, specifically the latest Brakfontein Mine agreement that appears to be fraught with irregularities.
This follows media reports alleging that the latest Eskom coal contract, Brakfontein, was signed with the perennial friends of President Jacob Zuma, the Gupta Family. It is believed that very few of Eskom’s usual terms and conditions, such as a mine having a full water licence, to sign a coal supply contract were met. Brakfontein Mine is owned by Idwala Coal, a company controlled by the Gupta’s Tegeta Resources.
Unsurprisingly, this is not the first alleged irregular coal deal involving the Gupta’s that Eskom has pushed through. A previous coal contract with Vierfontein Mine, also owned by Idwala Coal, received significant push back from three top Eskom executives as the deal did not meet the prerequisites and therefore seemed far too risky for Eskom to take on. Notwithstanding this, the Gupta’s were allegedly heavily involved and enriched by coal contracts servicing Eskom.
It appears that political interference may have been involved, with some resistance from Eskom management and senior executives, in the awarding of coal supply tenders to the Gupta family and their associates.
It must never be forgotten, that the Gupta’s received two allocation slots for coal exports at Richards Bay. These slots are very difficult to come by and are exceedingly valuable as one can sell the allocation to other companies. This begs the question of how Tegeta – a Gupta family company – that does not produce the requisite high volumes of coal got awarded such a contract?
I will also therefore be putting forward parliamentary questions in the following regard:
Why was Brakfontein awarded a R400 million a year coal contract when it did not meet usual Eskom terms and conditions,
Did Zola Tsotsi unduly influence the awarding of the Brakfontein coal supply contract,
How much has Eskom paid in terms of the Brakfontein contract in the 2013/2014 and 2014/2015 financial years,
Does Eskom pay the market rate for coal to Brakfontein, and
Did Eskom follow an open and transparent bidding process for its coal supply?
It has been further revealed that Eskom, signed the coal supply deal with the Gupta’s three days before suspending CEO, Tshediso Matona, and other high ranking Eskom management.
These suspensions, which appear to be over the alleged Gupta coal contract, have left a leadership vacuum at a time when Eskom has severe financial problems, crumbling infrastructure and is trying to complete complicated projects such as Medupi and Kusile.
At the heart of this are the commercial interests of powerful and well-connected business people allegedly able to exert political influence on the signing of a contract three days before the suspensions. Labour Court proceedings, instituted by Matona, show that the decision to suspend the executives was made prior to Minister of Public Enterprises, Lynne Brown, approaching the board for clarity.
We will continue to ask why, at a time when Eskom needs to be perceived as stable, the permanent executive team was suspended without an iota of prima facie evidence against them at the same time that a supposedly irregular coal contract was concluded. South African’s can ill-afford to have the Gupta’s or any other politically connected individuals making a killing on the back of ordinary, hardworking and already pressurised South African’s.
Statement issued by Natasha Mazzone MP, DA Shadow Minister of Public Enterprises, April 19 2015
