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Tegeta pre-payment against Eskom procurement processes, inquiry hears

Eskom official Snehal Nagar says Bhana Naidoo simply gave an instruction for the payment without giving details, adding that Eskom didn’t budget for the dodgy transaction.

A screengrab of Eskom official Snehal Nagar appearing at the Zondo Commission on 5 March 2019.

JOHANNESBURG - Eskom official Snehal Nagar on Tuesday told the state capture commission that the power utility's former executive director Maya Bhana Naidoo instructed him to process a pre-payment of over R400 million to Gupta-owned company Tegeta.

Last year, Treasury released its final report on Eskom, which found the power utility flouted company policy and public finance rules to benefit Tegeta which was awarded coal contracts of over R1 billion.

The report also found the R600 million advance the parastatal gave to the Gupta company was irregular. Snehal Nagar has explained the events that led to Eskom processing the pre-payment to Tegeta.

“Ms Naidoo instructed us to make a payment that was approved by the board tender committee that was R659 million. She had also indicated that the payment needs to make within two to three hours time, or before 2pm.”

He says this was against Eskom’s procurement processes.

“The treasury division needs to make the money available. The shared services team would need to be on board to effect the payment. We would need to process the payment, so everybody would need to be on board.”

Nagar says Bhana Naidoo simply gave an instruction for the payment without giving details, adding that Eskom didn’t budget for the dodgy transaction.

WATCH: Zondo Commission hears about Eskom payments to Tegeta

R659M ESKOM PRE-PAYMENT TO TEGETA QUESTIONED

Nagar conceded that normal procurement processes were ignored when the power utility processed a multi-million-rand pre-payment contract with Tegeta.

Nagar, who was one of the people that affected the unlawful pre-payment, has told the state capture inquiry he was simply following instructions from his bosses.

The dodgy deal was signed by former acting CEO Matshela Koko and witnessed by Anoj Singh.

Tegeta bought the Optimum Coal Mine from Glencore through a controversial transaction in which Eskom gave the Gupta-owned company a R659 million pre-payment to help with the purchase.

The pre-payment from Eskom to Tegeta was investigated by Treasury and its report last year concluded the transaction was unlawful and unwarranted.

“We certainly didn’t follow the correct procedure in the way it should have been normally done, governance issues were at stake,” Nagar said.

He said he asked himself some questions about the transaction.

“Why I’m I paying somebody R659 million to prepay for coal? And I don’t understand the details behind that.”

But the payment was eventually progressed and Nagar said he would have been charged with insubordination had he challenged the instruction to make the payment.

(Edited by Thapelo Lekabe)

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