Deputy Chief Justice Raymond Zondo is the chairperson of the Commission of Inquiry into State Capture. Picture: Karen Sandison/African News Agency (ANA)
Deputy Chief Justice Raymond Zondo is the chairperson of the Commission of Inquiry into State Capture. Picture: Karen Sandison/African News Agency (ANA)

#StateCaptureInquiry: 'R587m payment to Gupta coal firm made me uncomfortable'

By Samkelo Mtshali Time of article published Mar 9, 2019

Share this article:

Johannesburg - A senior Eskom manager on Friday told the commission of inquiry into state capture that the R587 million pre-payment by the power utility to Gupta-owned Tegeta Exploration and Resources was the first and the only one he ever approved.

Eskom’s contracts manager Gert Opperman said in the nine-and-a-half years he had held the position it was the first time he had been asked to approve such a payment and had not done so since it was paid out in 2016.

He also informed the commission chaired by Deputy Chief Justice Raymond Zondo that initially the money had been given to him for approval as though it were a normal invoice.

“It really did make me very uncomfortable,” Opperman said.

According to Opperman, he showed his then-boss, Petrus Mazibuko, the paperwork which just consisted of two documents and they both agreed that they should request more supporting documents as he was reluctant to sign off on a big amount based on incomplete documents.

He said he was then provided minutes of an Eskom board teleconference meeting and those of another Tegeta board meeting.

During his testimony, Opperman also admitted that Tegeta had fines for poor quality of its coal supply slashed from over R2billion to R255m after the controversial family bought Glencore-owned Optimum Coal.

This followed differing testimony and evidence by Eskom officials about the penalties accumulated by Optimum Coal in the period the company was owned by mining giant Glencore and later by Tegeta.

Opperman told the commission that another Eskom official, Christo Kruger, put the penalties at R2.28bn while he calculated them to R720m but only up until April 2013.

He pleaded that he was unaware of how Kruger had arrived at the R2.28bn figure.

Head of finance in the power utility’s primary energy division Snehal Nagar revealed to the commission that Optimum Coal had been fined R2.1bn for poor quality coal; however, its former executive director Suzanne Daniels decreased the claim to just above R166m.

Optimum eventually offered to pay about R255m after initially proposing a settlement of almost R239m.

Nagar said upon review there was no link in the memo to the potential total claim value that was due to Eskom (about R1.17bn).

Opperman further testified that Optimum supplied coal to the Hendrina power station that did not meet criteria and had a high abrasive index, which is the measure of how much the coal wears off the metal surfaces it comes into contact with.

In terms of its contract with Optimum Coal, Eskom fined the Mpumalanga mine R1.23 per ton for abrasive index between 423 and 500 a ton.

Evidence leader Vincent Maleka said there was an inexplicable set of reasons for the reduction of the Tegeta penalties and that the commission deserved clarity.

“There is something more than a miscalculation,” Maleka said.

He said the imposition of fines should remain regardless of who the owners of Optimum Coal mine were.

The mine is no longer operational.

Opperman replied that the Hendrina power station now received its coal supply from three other sources in the Witbank area.

Opperman, Eskom’s fuel supply general manager Johann Bester and Optimum Coal’s business rescue practitioners are expected to testify next week.

Political Bureau

Share this article:

Related Articles