coal

South Africa’s National Treasury has raised concerns around Eskom’s recent statement in relation to its Tegeta Exploration & Resources coal contract currently under investigation. The utility said on Monday that "it has been cooperating with National Treasury”, however Treasury claims “its efforts have met resistance".

Denying all claims made against it by Treasury, the utility says that it is "shocked and perplexed".

Eskom: inconsistencies in communication

According to Treasury, it has made several attempts since April to draw information from the parastatal, which has continuously been ignored.

On the contrary, the utility said in a statement: “Through our normal interactions with the National Treasury, [we have] repeatedly provided information to the National Treasury and where additional time is required has informed the National Treasury that some of the additional information that it had requested would only be supplied after Board approval.”

The utility further explained that the most recent correspondence from Treasury was on 17 August 2016, in which the latter supported the extension of the coal supply contract for the Komati Power Station.

In approving the extension, the National Treasury stated that the reason provided for the extension is that there is a need for continuous supply of coal to Komati as well as the utilisation of the stockyard at Koornfontein premises to supplement the coal stockyard at Komati. “The National Treasury supports the extension of this contract.”

Issued requests

Confident that they have been in compliance with Treasury requests, the parastatal said in a statement: "The first request for information from National Treasury to Eskom was received on 31 July 2015. A response was sent to them and they came back with their first draft report requesting further information on 15 September 2015.

"We responded to that request and they came back with a second draft report asking for more information on 21 October 2015. [We] responded on 11 November 2015 with the required information including all invoices and payments made to Tegeta as an annexure to the response. The third request was received on 12 April 2016. [We were] asked to comment on a 172-page document."

This request was accompanied by a request from National Treasury to provide comments after they had been considered by the utility's Board. The deadline given was 30 April 2016.

 The utility added that this request was unreasonable and therefore the utility requested an extension to provide the information, which was granted by National 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.
"Furthermore, in a letter from Mr Molefe to Mr Brown [chief procurement officer at Treasury] dated 24 June 2016 Mr Molefe informed National Treasury of Eskom’s intention to submit the required information after it has been reviewed by the Eskom Board, as per National Treasury instruction of 12 April 2016."
The parastatal further stated that it has compiled a response to National Treasury’s report dated 12 April 2016 and the responses are due to be tabled for consideration by the Eskom Board as per National Treasury’s instruction during September 2016. These responses have already been tabled and reviewed by the procurement subcommittee of the Board on 16 August 2016.
The only letter that Eskom is aware of in which the Minister of Finance refers to prepayments to Tegeta was dated 17 August 2016.
The parastatal is in the process of compiling a response in this regard in line with our media statements already issued on this topic.
The utlity added in a statement on Sunday that Treasury has not issued any conclusive findings against them on any of these contracts.