Clamping down on coal syndicates a priority: Ramaphosa

24 October 2023 - 14:24
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President Cyril Ramaphosa has hailed the 234 arrests emanating from the operations of the energy safety and security committee since January. File image.
President Cyril Ramaphosa has hailed the 234 arrests emanating from the operations of the energy safety and security committee since January. File image.
Image: GCIS

President Cyril Ramaphosa hailed law enforcement agencies for achieving a huge breakthrough earlier this month in the effort to root out corruption at Eskom.

A multidisciplinary team supported by the South African Revenue Service carried out a search and seizure operation targeting coal smuggling syndicates operating in five provinces.

In his weekly newsletter Ramaphosa commended the seizing of documents from individuals alleged to have committed offences including procurement fraud, tax crimes and coal diversion, saying it will support the drive to recover assets obtained from the proceeds of crimes.

This latest operation follows a raid in September on an illegal coal mine in Mpumalanga by the police illicit mining task force where mining equipment valued at approximately R60m was seized.”

Coal diversion is when coal trucks carrying high-grade coal destined for power stations are diverted to bogus and illegal coal yards by criminal syndicates. This high-grade coal is removed to be sold and replaced with a substandard product that is delivered to Eskom. 

The president said the crime of coal smuggling lays bare the impact of corruption on people’s lives. 

“When I visited the Tutuka power station in Mpumalanga last year, the plant’s management explained to me the damage caused to its operations by the inferior coal.

The coal is often mixed with stones and other materials. They explained the conveyor belts at the power stations repeatedly break down because the stones damage the belts, with the result that spare parts have to be bought at substantial cost.”

Ramaphosa said the entry of poor grade coal into the production processes further affects power station boilers, causing corrosion and other long-term damage. 

This single criminal act reduces the country’s energy generation capacity, and directly affects every South African household and business struggling under load-shedding

“This is contributing to the declining performance of Eskom’s coal-fired power stations and increased maintenance costs. This single criminal act reduces the country’s energy generation capacity, and directly affects every South African household and business struggling under load-shedding.

“This is having a detrimental effect on our economy, holding back growth, constraining job creation and deterring investment. Coal smuggling and other forms of wilful damage to critical infrastructure are no less than economic sabotage, and our government is treating them as such.”

Because of this, the president said one of the workstreams of the national energy crisis committee and the energy safety and security committee is focused on illegal coal yards, the trade in fuel and fuel oil and other forms of infrastructure crime that contribute directly to load-shedding.

This workstream is supported by a tactical joint operations centre in Mpumalanga, where most of our coal-fired power stations are located. Our focus on strengthening the institutions tasked with investigating and prosecuting these cases and ensuring greater co-operation and information-sharing between them is producing results. 

“Asset forfeiture is playing an important role in ensuring those implicated in corrupt activities are unable to hide their ill-gotten gains from the law. In December 2022, several people were arrested and trucks used in coal diversion seized after illegal coal yards in eMalahleni were raided.” 

The president hailed the 234 arrests emanating from the operations of the energy safety and security committee since January this year, noting the value of items confiscated amounted to more than R260m.

A number of investigations by the Special Investigating Unit into Eskom-related corruption continue to yield results. To date, coal supply agreements valued at approximately R3.7bn have been declared invalid through litigation, and coal supply agreements and construction contracts valued at R10bn have been set aside.”

Ramaphosa described corruption — whether petty bribery, procurement fraud or large-scale misappropriation of funds — as a rot that affects all of society.

He vowed there would be more arrests and seizures as the impunity that has allowed many to believe themselves beyond the reach of the law is a thing of the past.

To stop the rot at Eskom, mining houses, labour, business and civil society need to work together. The media also needs to continue the work it is doing to uncover criminal acts at Eskom. If we continue to work together, we will ensure these coal syndicates have nowhere to hide, that they do not benefit from their crimes and, even if it takes some time, that they ultimately pay for them.”

TimesLIVE


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