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Tegeta’s substandard coal to Eskom lead to load shedding in 2015, inquiry told

After Eskom signed the coal agreement with the Gupta-owned Brakfontein coal mine, the power utility started complaining about the quality of coal it received.

Eskom's Kendal Power Station is coal-fired and situated in Mpumalanga. Picture: eskom.co.za

JOHANNESBURG - The state capture commission has heard how Eskom paid millions of rands to a Gupta-owned mine in exchange for substandard coal.

The commission’s Advocate Kate Hofmeyr has described the evidence in the inquiry’s possession showing that Gupta-owned company Tegeta dictated the terms for a business agreement with the power utility in the absence of due diligence.

The evidence was submitted by former Eskom executive Dr Mark van der Riet, who died, allegedly just hours after signing off on his submission to the commission earlier in 2019.

After Eskom signed the coal agreement with the Gupta-owned Brakfontein Coal Mine, the power utility started complaining about the quality of coal it received.

Hofmeyr explained to the commission that when the coal was taken to an independent laboratory to be tested, 15 of the 30 samples from the Gupta mine failed the quality test.

“But, there was suddenly an allegation from Brakfontein mine that a bribe had been sought to be solicited from them by Sibonisiwe Laboratories.”

So, a decision was taken to take the same samples to another accredited lab for analysis.

“When that happened [is that the] SABS failed 29 out of the 30 reanalysed samples.”

Hofmeyr says the late van der Riet then decided to be present when the coal would be tested again, but he was instructed by his boss Matshela Koko not to go and witness the process.

She says the sample that was analysed in the absence of Eskom, then mysteriously passed the quality test.

LOAD SHEDDING

The state capture commission has heard how the substandard coal supplied by the Gupta-owned Brakfontein mine may have contributed to the load shedding the country experienced in 2015.

The commission has also heard how pressure was heaped on Eskom to conclude the R4.3 billion business deal with Tegeta within 48 hours.

When the country experienced load shedding between 2014 and 2015, a task team was established by Eskom to assist with resolving the power cuts and van der Riet was part of that team.

Hofmeyr says van der Riet and his team had a good picture of what was contributing to load shedding.

“The rationale was that unacceptable coal quality was leading to coal-related load losses which were a major contributor to the load shedding.”

She says the task team then wanted to investigate the coal which the Gupta-owned mine was supplying to Eskom.

“[They] Were all suspended on 1 September 2015 prior to being able to initiate the investigation.”

But the commission heard evidence that the coal failed the quality test when it was analysed by two independent laboratories.

This was confirmed by a report from Treasury in 2018.

WATCH: Gupta coal under the spotlight at Zondo Commission

(Edited by Zamangwane Shange)

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