File picture: Independent Media

Parliament - Eskom’s head of generation Matshela Koko stumbled to answer questions before the Eskom inquiry when asked whether the power utility benefited from the R1.6 billion that Eskom paid to Gupta linked company as prepayment for coal supply.

Parliament’s evidence leader Ntuthuzelo Vanara told Koko, “now that coal was not delivered to Arnot power station in terms of the arrangement of the contract”,

Koko hesitated and stumbled into a “I cannot comment further, but I hear you” response.

“Optimum has to be discharged out of business rescue as a going concern. Only when there is a going concern, can it guarantee coal for the future,” added Koko.

Eskom did not benefit out of that contract but Tegeta did, Vanara told Koko. The Gupta linked family ended up with a R1.6 billion guarantee from Eskom.

The portfolio committee asked Koko to deal specifically with Gupta-linked Tegeta’s purchase of the Optimum coal mine from Glencore and the prepayment for coal to Tegeta.

He describes how Glencore bought Optimum in 2012 and pressured Eskom to increase the price paid for Hendrina power station coal.

The relationship between the power utility and Glencore deteriorated and in July 2015 Eskom issued a letter of demand for R2.18 billion in penalties for sub-standard coal supplied over an extended period.

Koko also conceded that the Treasury did not agree to the extension of coal supply contract from Tegeta.

The power utility sent a request to treasury for the contract to be extended to provide Eskom’s Arno Arnot Power Station with coal.

Treasury said in a letter: “National Treasury does not support the extension of the existing contact, but it supports the deviation to request four potential suppliers to submit proposals for volumes of supply,”

In an attempt to minimise the damage, Koko said the media was running with an agenda which was untrue. 

"The narrative that has been spun by the media and others is that Optimum was driven into business rescue by Eskom with the intention to enable Tegeta to acquire Optimum Coal Holding’s assets‚ and that when Tegeta by April 2015 fell short in putting up the money‚ Eskom made a prepayment to Tegeta to enable it to make payment‚"

Like his counterpart, Koko has denied allegations that the Gupta linked company Sahara computers sponsored his Dubai trip in January 2016. 

He said he made direct payments for all expenses during the trip, where he travelled with his family.

He denied allegations that he facilitated the approval of a huge payout to global consultancy firm McKinsey and its local subcontractor, the Gupta-linked firm Trillian despite being advised by legal experts that the contract was not within the law.

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