The Zondo Commission of Inquiry into State Capture. File picture: Karen Sandison/African News Agency(ANA)

Johannesburg - Eskom executive Daniel Mashigo on Tuesday told the Zondo Inquiry that the financial evaluation of Gupta-linked coal mining company Tegeta Resources was done "just to tick the box" after a multi-billion rand contract with Eskom had already been signed. 

In 2014, Eskom entered into a 10-year coal supply agreement worth R4.3 billion, with Tegeta Exploration and Resources to supply 50 percent of the coal at Majuba power station from its Brakfontein mine in Mpumalanga.

Mashigo, Eskom's acting senior general manager for primary energy division, said financial evaluation was one of the critical components when awarding a contract. 

He said that the financial assessment done on Tegeta showed that the company was not in the position to deliver to the set requirements of the contract. The coal supplied by Tegeta was also found to be substandard, and the company filed for business rescue in February 2018. 

Mashigo said that it was out of the norm to conduct the financial assessment after the contract had been signed, adding that 90 percent of awarding the contract is based on the financial ability of the company to deliver on the contract.

Evidence leader, Advocate Kate Hofmeyr said that the evidence obtained from Eskom hard drives will show the inquiry that considerable pressure was placed on Eskom employees to finalise the coal supply agreement within 48 hours.

Reports show that Eskom had entered into the agreement with Tegeta in December 2014, prior to a financial due diligence being completed, without a condition precedent being completed, and with no successful combustion tests being done on the coal that was going to be supplied. 

The inquiry continues. 

African News Agency (ANA)