Eskom in “advanced talks” with seven coal companies to renegotiate over priced contracts

Optimum Coal Mine

SOUTH African power utility, Eskom, was in “advanced talks” with seven coal suppliers regarding negotiation of supply contracts which were “inflated above market price”.

Andre de Ruyter, CEO of Eskom, said today in response to questions posed during a joint presentation to Parliament’s Appropriations Committee on May 27 that progress was being made.

“We have identified seven coal suppliers who, in our opinion, are charging Eskom too much for the coal that they supply us,” said De Ruyter. Eskom added that some of the coal contracts had been concluded “years ago” and that the negotiations were therefore “sensitive”.

It didn’t provide additional details. However, Eskom has been criticised in the past for concluding ad hoc coal supply agreements with junior miners that incurred significant transportation costs that were ultimately charged to Eskom.

The parliamentary questions made the erroneous assumption that some R5bn had been mistakenly paid by Eskom to a contractor, and that the utility had failed to recover the monies and, additionally, had failed to disclose the party involved.

De Ruyter said it was beholden on Eskom to recover all stolen monies, such as the R600m owned to it by consultancy Trillian in a transaction presided over by McKinsey & Co, Trillian’s then partner.

As a consequence, Eskom was seeking the repayment of R5bn owed to it by Tegeta Exploration & Resources, a company owned by the Gupta family who have been heavily linked with so-called state capture. “We are participating in the business rescue process of Tegeta Exploration & Resources where we have a claim of R5bn against the business rescue practitioners.

“We think that based on the available money it will unlikely be that we will realise the full R5bn and we will probably receive a significantly smaller amount than that,” he said.

Tegeta Exploration & Resources bought the Optimum and Koornfontein mines out of business rescue using money fraudulently advanced to it by Eskom for future coal supply. The mines were plunged again into business rescue following the collapse of Tegeta Exploration & Resources.

1 COMMENT

  1. Forget these “advanced talks” – swopping R100bln of GEPF cash for ESKOM shares. Now that, my friends, is a sweet deal worth mentioning😚

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