Molefe not personally involved in contract negotiation with Tegeta

Picture credit: Freddy Mavunda
Picture credit: Freddy Mavunda

Eskom CEO Brian Molefe said on Tuesday he was not personally involved in contract negotiations with Gupta-linked company Tegeta on the coal supply agreement for the Brakfontein colliery.

Molefe was in parliament to brief the Standing Committee on Public Accounts (Scopa) to explain the PricewaterhouseCoopers (PwC) report on Eskom’s coal supply agreement with Tegeta Exploration and Resources.

The report noted that in its haste to award Tegeta with lucrative coal contracts‚ Eskom had failed to apply due diligence.

 This included a failure to ensure Eskom’s evaluation team was not conflicted when deliberating on deals involving Tegeta.

Molefe told parliamentarians on Tuesday that Eskom’s engagement with Tegeta on the Brakfontein colliery started in May 2013‚ the negotiations went on for about two years and the contract was signed in March 2015.

“I must indicate … there has also a lot been written that I was personally involved in those negotiations and in that contract. I wasn’t. It was signed in March 2015. I arrived at Eskom in April 2015‚” Molefe said.

However‚ the public protector‚ in her state capture report released in November last year‚ listed conversations that Molefe had with the Gupta brothers between August 2015 and April 2016.

The public protector’s report led to Molefe stepping down from Eskom‚ only to return earlier this month after saying that his early retirement had been rescinded by the Eskom board.

Molefe said on Tuesday the PwC report was not about Tegeta.

“It was about our control environment with respect to the contracting for coal.”

He said Eskom commissioned PwC in July 2015 to look at the power utility’s control environment in the coal contracting space.

“The PwC selected a few companies as a sample where they will look at the controls around those contracts and then make general recommendations about our control environment‚” Molefe said.

He said the companies that were selected were Tshedza Mine‚ Keaton Mining‚ Tegeta Mine and Universal Coal.

Molefe said in November 2015‚ PwC made recommendations that highlighted 48 control issues that Eskom needed to attend to.

 Eskom management considered these findings and started implementing measures from December 2015 to correct the shortcomings.

“In September 2016‚ 39 of the 48 had been addressed. As we speak now … three are remaining.”



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