The North Gauteng high court has set aside a controversial R3.7bn coal supply contract between Gupta-linked moning company Tegeta and Eskom, the justice department said on Friday.

Justice and correctional services minister Ronald Lamola said Special Investigating Unit (SIU) head advocate Andy Mothibi had informed him of the court order.

In 2018, the SIU filed papers in the court, demanding that the agreement be declared “unlawful and invalid”,  City Press reported. The SIU was also demanding a hefty costs order against Eskom and Tegeta.

According to City Press, after coal shortages in 2018, Eskom exploited a 2008 emergency medium-term coal procurement mandate to award coal supply agreements between 2013 and 2015. It was apparently used to hand Tegeta its lucrative contract in 2015, of which Tegeta was allowed to dictate the terms an extension until 2025.

On Friday, Lamola welcomed the court order, saying: “The fight against corruption will not be won without action by law enforcement agencies.

"Maladministration often lays the basis for corruption to thrive at a great expense to the fiscus, and ultimately service delivery, and we are encouraged when efforts to recover resources of the people of South Africa are intensified and yield results,” he said.