Nothing at fault in Tegeta coal deal, says Eskom

Eskom CEO Brian Molefe has spoken out about the parastatal's very public and potentially damaging spat with the national Treasury for the first time, saying Eskom had done no wrong in awarding a coal contract to a Gupta-owned firm.

MPs grilled Molefe and Eskom board chairman Ben Ngubane yesterday about the "herd of elephants in the room", referring to Gupta-owned enterprise Tegeta's coal-supply deals to Eskom.

The Treasury had earlier this week said Eskom had been attempting to block an investigation into its coal contracts and had not provided it with information requested several months ago.

Tegeta was awarded a contract to supply coal to Eskom in exchange for upfront payments.

But Molefe, in parliament to present Eskom's annual report, told the committee that there had been no move to block the information.

He said the information required the sign-off of the board, which will only meet again this month .

But, the CEO said, the information had been delivered to the Treasury yesterday after Public Enterprises Minister Lynn Brown intervened.

On the issue of the contract, Molefe told the committee that it seemed as if the objection "is not the substance of the transaction, but that we should not have done business with them at all".

He said the accusation that the coal was substandard had no basis because the consignment, marked as inferior by employees who had since been suspended, had been given the all-clear by the SABS.

The rand dropped to its weakest level in more than seven weeks and bonds fell after the country's biggest specialist private fixed-income money manager said it would stop lending money to six of the largest state-run companies.

Futuregrowth Asset Management shelved plans to lend more than R1.8-billion to several state-owned companies.

Those affected by the decision are Eskom, Transnet, Sanral, Land Bank, IDC and the Development Bank of Southern Africa.

- Additional reporting by Bloomberg