Business 29.8.2016 06:41 pm

Molefe hit by a ‘bazooka’ from Treasury

Eskom CEO Brian Molefe.

Eskom CEO Brian Molefe.

In the war of words between Eskom and Treasury, both sides are in effect saying the other is lying or playing political games.

The finance ministry on Monday accused Eskom chief executive Brian Molefe of failing to comply with requests for information about its coal contract with the Gupta-owned mining company Tegeta Resources.

Eskom responded soon after with a furious denial, saying it was shocked at National Treasury’s statement as it had duly complied except in one instance, where it believed it was set an unrealistic deadline.

In a frank missive, National Treasury said it had since April repeatedly tried to get information from Eskom relating to Tegeta, including about money advanced to the company, but was met with “resistance”.

Its unmet demands included a request for a list of payments to Tegeta and invoices received from the company between September and the end of April.

Treasury said its Lungisa Fuzile subsequently wrote to Eskom to ask that it withdraw its insistence that “all the Tegeta coal contracts with Eskom have been extensively audited by various agencies, including National Treasury”, whilst clearly that was not the case.

Furthermore, it said, Finance Minister Pravin Gordhan then took the matter to Eskom’s chairman Ben Ngubane, and raised concerns about advance payments made to Tegeta and the failure to submit the information as requested.

“To date, not only has Eskom failed to honour its undertaking to submit comments to Treasury’s report, but it has chosen to ignore correspondence and put all forms of hindrances,” the treasury said.

National Treasury’s chief procurement officer Kenneth Brown has been investigating contracts worth more than R10 billion in a bid to clamp down on corruption.

The statement comes after the perceived tug-of-war between Gordhan and President Jacob Zuma for control of state-owned entities escalated with the Directorate for Priority Crime Investigation (Hawks) closing in on the minister in its probe into the intelligence gathering unit at the revenue service and Cabinet agreeing to set up a council that will give Zuma direct control over parastatals.

The Tegeta contract has been making headlines for months. It emerged in June that Eskom had, despite initial denials, paid Tegeta in advance for coal.

Last week, documents were leaked which showed the company threatening to interdict National Treasury should it release the report emanating from its investigation to the Democratic Alliance, which had requested it in terms of the Promotion of Access to Information Act.

At the weekend, the Sunday Times wrote that the report revealed that Eskom had paid Tegeta more than R130 million for substandard coal. The same newspaper quoted the minister as telling Treasury staff last week that he was prepared to lay down his life to fight state corruption.

Eskom, in its statement on Monday, said it was “shocked and perplexed” that National Treasury had opted to issue the statement it had.

“Eskom wants to reiterate that it has been co-operating with National Treasury,” it said.

The utility added that it objected when, on April 12 this year, it was asked to comment on a 172-page report from Treasury because the deadline was not realistic. It then asked for an extension, which was granted, it said.

“We therefore think it is neither unreasonable that our Board will have considered responses to the 172-page document by end of September 2016 nor a reason for National Treasury to label Eskom as uncooperative. Furthermore, in a letter from Mr Molefe to Mr Brown dated 24 June 2016 Mr Molefe informed National Treasury of Eskom’s intention to submit the required information after it has been reviewed by the Eskom Board, as per National Treasury instruction of 12 April 2016.”

The DA described the extraordinary exchange between the finance ministry and Eskom as Gordhan raising a “bazooka” at Molefe.

– African News Agency (ANA)

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