Eskom and Treasury clash over coal probe

The saga around the National Treasury’s investigation into Eskom’s coal contracts has taken another turn.

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Johannesburg - The saga around the National Treasury’s investigation into Eskom’s coal contracts took another turn yesterday when the Treasury accused Eskom of resisting its probe into contracts with Gupta family-owned Tegeta Exploration & Resources.

The Treasury said yesterday that it had “noted with concern” Eskom’s claims that it had been co-operating with the process of reviews of the coal contracts.

“The National Treasury would like to categorically state that its efforts have met resistance,” it said.

The department said it had made several attempts to get information from Eskom, including a request for a system-generated list of payments made to Tegeta and invoices received from Tegeta for the period September 1 last year to April 30 this year.

“To date, not only has Eskom failed to honour its undertaking to submit comments to the Treasury’s report but (it has) chosen to ignore correspondence,” the Treasury said.

It accused Eskom of refusing to co-operate with the investigations into coal contracts given to Gupta-owned companies, dismissing Eskom’s claims over the weekend that it had been co-operating with it on the Tegeta contracts. It said the constitution required that public finances should be accounted for and no entity was exempt from this requirement.

Reports emerged last week that Tegeta was planning to take the Treasury to court to block the release of the report into the coal contracts.

The contracts are reportedly worth R400 million a year for a period of 10 years.

The Treasury indirectly accused Eskom of spreading false information. It said National Treasury director-general Lungisa Fuzile had written to Eskom requesting that the utility withdraw a June 12 statement suggesting that “all the Tegeta coal contracts with Eskom have been extensively audited by various agencies, including National Treasury”.

Treasury said that was “clearly” not the case.

Eskom made the claims amid reports that it had made a prepayment of R578m to Tegeta Exploration and Resources for coal. At the time, Eskom chairman Baldwin Ngubane defended the decision.

Treasury said yesterday that Finance Minister Pravin Gordhan had raised concerns about the advance payments with Ngubane. “It is Treasury’s view that a company or entity that is doing business with government and has nothing to hide should be transparent and welcome reviews of its dealings with the state. Members of the public also deserve to know how public finances are spent. It should, therefore, concern all South Africans that there are efforts to block and undermine the reviews,” the department said.

Eskom said yesterday that it stood by its assertion that it had been co-operating with the Treasury. The utility detailed a chronology of events since the end of July last year when the Treasury initiated its investigation. These include the Treasury’s requests for more information.

On April 12, the Treasury asked Eskom to comment on a 172-page document. “This request came with a specific instruction to provide comments after they had been considered by the Eskom Board. The deadline given was 30 April 2016,” Eskom said.

Eskom said such a request was unreasonable and had asked for an extension to provide the information, which was granted by the Treasury. “We therefore think it is neither unreasonable that our board will have considered responses to the 172-page document by end of September 2016 nor a reason for National Treasury to label Eskom as uncooperative,” Eskom said.

Eskom said, in a letter from its chief executive, Brian Molefe to the Treasury’s chief procurement officer, Kenneth Brown, dated June 24, informed the Treasury of Eskom’s intention to submit the required information after it had been reviewed by the Eskom board, as per the Treasury’s instruction of April 12.

Eskom refused to retract the June 12 statement that the Treasury had reviewed the Tegeta contracts extensively. “It is also true that the National Treasury has requested all contracts related to Tegeta and that these contracts were subject to an investigation by National Treasury,” Eskom said.

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