DA: Why is Eskom bidding billions on unsuitable coal?

Reports indicate Eskom intends to secure tons of unsuitable export-quality coal at a cost of R3.76 billion.

FILE: The Medupi Power Station. Picture: EWN

JOHANNESBURG - The Democratic Alliance (DA) on Monday said it wanted answers as to why Eskom was bidding billions of rands on unsuitable coal for its power stations.

The opposition party said reports indicated Eskom intended to secure tons of unsuitable export-quality coal at a cost of R3.76 billion.

It's understood this grade of coal would require costly blending down before it could be used.

The DA's Natasha Mazzone said, "I think it's a case of severe mismanagement yet again at Eskom, at a time where there are state entities under severe financial strain and is counting on government yet again for another bail-out."

Last week, it emerged the parastal paid up to R1.2 billion for coal it hasn't been able to use.

Despite the cash injection from the National Treasury and assistance from government to try and put Eskom back on course to keep the lights on, Business Day reported delays at the Medupi Power Station have cost the utility dearly.

By the end of this year, Eskom would have paid about R1.2 billion to Exxaro for coal it hadn't been able to use due to extensive delays at Medupi.

Exxaro is meanwhile reportedly benefiting from these delays after two years of income shortfalls.

It sells 94 percent of its coal to Eskom and while the fossil fuel isn't being used, it helps the company better exploit its high value export-grade coal.

Eskom hopes that Unit 6 at Medupi will be fully functional by June, producing 10 times what it's producing now.