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ESKOM INQUIRY
REFERENCE BOOK
A Resource for Parliament’s Public Enterprises Inquiry
Civil Society, Journalists & Engaged CitizensAugust 2017 This booklet has been authored by Professor Anton Eberhard and Catrina Godinho of the University of Cape Town’s Graduate School of Business. Research support was provided by Lauren Hermanus and Jesse Burton. It is part of the State Capacity Research Project - a group of academics from research institutions at the Universities of Stellenbosch, Witwatersrand, Cape Town and Johannesburg. As academics, our job is to make sense of complex situations and explain these. We are acutely aware that ongoing revelations of corruption can lead to general public fatigue but we hope that by joining the dots this booklet will contribute to the empowerment of civil society, journalists, and concerned members of the general public, so that they can follow and support the inquiry.
PREFACE
In September 2017, Parliament’s Public Enterprises Committee will begin its inquiry into alleged
manifestations of state capture in three of South Africa’s state owned companies (SOCs): Eskom,
Transnet, and Denel. The Committee will be under considerable pressure to drive a targeted investigation
that ultimately brings to light the information necessary to more fully understand the manner in which
the governance of key institutions may have been repurposed to facilitate large-scale corruption by a
politically connected elite.
The authors of this reference book have set out to provide an independent, accessible, concise, and fact-
based account of some, but not all, of the alleged instances of governance failure and corruption at the
largest SOC - Eskom. The authors hope that a streamlined and objective account of the deeply complex
challenges facing the power utility will be of assistance to the Committee, as well as members of the
general public.
Beyond shedding light on specific instances of wrongdoing – whether through dereliction of duty or
overt corruption, it is hoped that the Committee will also probe higher level structural and governance
questions in order to make recommendations around strengthening and reforming institutions in
the future.
CONTENTS
State of State Capture........................................................................................................................................................................ 2
Setting Sights on Eskom................................................................................................................................................................... 3
Generating Controversy ................................................................................................................................................................... 4
Repurposing Eskom Governance.................................................................................................................................................. 6
Koeberg Generators Tender.......................................................................................................................................................... 10
New Age Breakfast Deal...................................................................................................................................................................11
T-Systems...............................................................................................................................................................................................12
Duvha Boiler..........................................................................................................................................................................................13
Gupta coal..............................................................................................................................................................................................14
Squeezing Out the Coal Majors.....................................................................................................................................................18
Trillian..................................................................................................................................................................................................... 20
Impulse....................................................................................................................................................................................................21
Still in the Shadows...........................................................................................................................................................................22
Recommendations.............................................................................................................................................................................24
Eskom Inquiry Reference Book 1STATE OF STATE CAPTURE
At the start of November 2016, former Public Protector any claim that reported irregularities are random or
Thuli Madonsela’s State of Capture report was made unconnected – as would be the case with generalised
public after President Zuma’s legal team withdrew its corruption or maladministration – has been diminished.
bid to interdict its release. A turning point, Madonsela’s Instead, more and more information is coming to light
report provided the first comprehensive legal analysis that seems to corroborate claims that a coordinated
of the alleged systemic corruption being perpetrated political project of state capture has been underway,
through state owned companies (SOCs). whereby governance structures are systematically
repurposed to serve corrupt interests. This is evinced
Since then, South Africans have witnessed the rallying
in the centralisation of decision-making power, the
of civil society, investigative journalists, academia,
hollowing out of executive and oversight competencies
public leaders and concerned citizens, who have come
together to further this civic work – including through by granting top positions in SOCs and Ministries to
groups such as the South African Council of Churches inept or corrupt individuals, and the cultivation of fear
(SACC), the State Capacity Research Project (SCRP), and mistrust through the establishment of ‘shadow’
and the Organisation Against Tax Abuse (OUTA). institutions and lines of accountability. Such a ‘project’
would allow for the possibility of grand corruption at the
From these efforts, an overwhelming and growing highest level, the full ramifications of which have yet to
body of evidence - including that contained in the be felt.
#guptaleaks – has been built, which indicates that
the political power vested in the President, certain Allegations that such practices have been intentionally
Ministries, and the boards and executives of SOCs has waged across a range of government institutions and
been misused to benefit the interests of connected within SOCs have been levelled, leading the Portfolio
individuals and entities – most prominently the Gupta Committee on Public Enterprises to initiate an inquiry
family. This has been to the detriment of the functioning into governance failure and the abuse of public
of Government and those entities within the ambit of resources at Eskom, Transnet, and Denel.
state governance.
By shedding light on the modus operandi of a network
of implicated individuals and joining the dots between
examples of known impropriety, the plausibility of
2 Eskom Inquiry Reference BookSETTING SIGHTS ON ESKOM
Eskom is dominant in the power sector. It generates which totals around R140 billion per annum (excluding
more than 90 per cent of South Africa’s electricity, finance costs, depreciation and taxes). The operating
controls the entire national high voltage transmission budget includes maintenance, refurbishment, staffing
grid, and distributes around half of electricity directly to costs, consulting and service contracts, but the
consumers, with the remainder going to municipalities. largest component is for primary energy purchases
Eskom’s assets are valued at R710 billion and its capital - specifically coal, which is used to generate the bulk
expenditure programme amounts to around R350 billion of Eskom’s power. It is here that the most blatant
over the next five years. acts of corruption appear to have been perpetrated
- through the awarding of over-priced coal contracts,
With annual revenues nearly three times that of Transnet
and six times SAA’s, Eskom is by far the largest state the squeezing out of incumbent coal majors, and the
owned company (SOC) in South Africa. This has made questionable acquisition of coal mines by the Gupta
the utility vulnerable to corrupt interests. family, financed by Eskom.
Currently, Eskom is building amongst the largest coal Average coal costs are now close to R400 per ton, up
power stations in the world – Medupi and Kusile – each from R190 per ton in 2011. During load-shedding years,
4800 MW in capacity, and has recently completed diesel fuel costs for Eskom’s peaker plants were as
the 1332 MW Ingula pumped storage facility. The late high as R10 billion per annum, also allegedly inflated
commissioning of these power stations contributed by corruption.
to severe load-shedding in recent years, which has Burgeoning costs, arguably propelled by rent-seeking
been detrimental to economic growth. In addition, and corruption, have resulted in electricity tariffs
these power stations have cost more than double their increasing by more than 400% over the past decade
original budgets. There were more than 40 construction
while electricity services have deteriorated. The effects
contracts for each power station, none of them in the
of this on the South African economy and prospects
public domain, with allegations of inflated prices and
for economic development and transformation hardly
corruption. However, any information that could validate
need to be stated and reinforce the urgent need for
or disprove these claims has been kept in the dark.
governance and structural reforms at the utility.
What has come to light, however, is evidence that would
suggest corruption in Eskom’s operating expenditure -
Eskom’s assets, revenue and expenditure 2016/7 (Rands)
Assets 710 billion
Capital expenditure 55.8 billion
Revenue 177 billion
Net operating expenses 139.6 billion
Coal purchases 50.1 billion
Staffing costs 33 billion
Source: Eskom Annual Financial Report 2017
Eskom Inquiry Reference Book 3GENERATING CONTROVERSY
2009–2017 Governance Advisory
Respected Public President Minister Gigaba
All Eskom Enterprises Minister Zuma intervenes Minister Glencore invokes Coal Maintenance/
Eskom CEO Jacob Maroga
resigns having lost President procurment Barbara Hogan dis- appoints in Koeberg Gigaba ‘hardship clause’ Repair/
Jacob Zuma Zuma’s protection, Eskom centralised missed, having resisted Malusi Gigaba Procurement, overhauls Zola Tsotsi on Optimum Coal Nuclear Refurbishment
becomes Chair steps down to make Brian Dames with creation President Zuma’s Minister Duvha pushing Eskom Board becomes Holding’s coal supply
President of Maroga’s resignation appointed as of Group alleged interest in SOC of Public Turbine Westinghouse - all but two Chairman of agreements. Price IT & Media New build
South Africa acceptable to the ANC Eskom CEO Commercial Board Appointments Enterprises destroyed aside replaced Eskom Board negotiations begin
Board Tender
2013 Committee, headed by
2009 2009 2010 2010 2010 2011 2011 2011 2013 Aug Collin Matjila announces
May Nov July Sept Nov March April June July IT tender
Board Tender
Acting CEO Matjila signs R43mil deal Zola Tsotsi appoints Committee Paris trip
2013
Previous Public President Zuma Eskom awards President Zuma Matshela Koko with Gupta’s New Age Collin Matjila Acting Dec sposored by Areva
Enterprises DG signs Nuclear Koeberg steam appoints Lynne takes over Group CEO Eskom, going Shareholder
Tshediso Matona deal with generator tender Brown Minister of Technology & Acting CEO Matjila sabotages IT tender contract against earlier Board
appointed Eskom CEO Russian Rostom to Areva Public Enterprises Commercial that could save Eskom almost R1bn recommendation
2014 Eskom CEO Brian
March Dames steps down
2014
Oct Duvha Boiler Explodes
2014 2014 2014 2014
Eskom signs coal contract Allegedly under
Sept Aug May April
with Gupta owned pressure from
Nationwide Brakfontein - frequent President Zuma,
load-shedding 2014
Nov IT tender scrapped, Eskom recieves extensions of contract Zola Tsotsi’s Board Ben Nugubane is CEO Brian Molefe refuses
begins T-Systems (with R23bn equity length, coal volumes suspends four of appointed Eskom Minister Brown to sign new agreement with Nationwide load-shedding ends
new connection to bailout & R60bn and prices, despite coal its top officials. Chairman despite seconds Brian Molefe Glencore, forcing Optimum
Guptas) contract subordinated loan not meeting required Chairman Tsotsi then allegations of unethical from Transnet to take Holdings into business
Anoj Singh seconded
extended converted to equity specifications pressured to resign and improper conduct over as Eskom CEO rescue later in the year
Minister Brown flips 2014 from Transnet, taking
Eskom Board, 6 of 8 Dec over as Eskom CFO
appointments linked to
Gupta Cabal 2015 President Zuma
2015 2015 2015 2015 2015 Aug
Three experienced and May appoints Mosebenzi
Jan Feb March April
respected top Eskom Zwane Minister of
executives step down 2015 Mineral Resources
Minister Brown tells Eskom CEO Brian Molefe Tegeta Eskom pays Tegeta given lucrative Sept
parliament that Eskom resigns in the wake of the Nuclear Public Protector transfers Trillian R495mil for contracts, relaxed terms
Minister Brown instructed to
has no contractual State Capture Report, Procurement releases State Capture funds to buy consulting services, on supply agreements, 2015 appoint Richard Seleke DG of
engagements with Matshela Koko takes over shifted to Report – Eskom Optimum including R30.7mil and on April 13 a Dec
Public Enterprises
Trillian conduts “high- Trillian as Acting CEO Eskom appears 913 times 14 April paid 14 April prepayment of R659mil
level cost benefit analysis President Zuma fires Finance
over a two-day period” in Minister Nhlanhla Nene,
which Dongfang emerges inserting Des van Rooyen
as the preferred bidder
for Duvha boiler 2016 2016 2016 2016 2016 President Zuma appoints Pravin
Dec Nov Oct April Starts Jan Gordhan Finance Minister under
Dongfang awarded 2017 pressure from the ANC
Matshela Koko steps down as Minister Brown forces Charles Kalima & Edwin Gupta’s sell
tender of R4bn, including March Constitutional Eskom CEO pending investigation resignation of some Anoj Singh admits that Mabelane suspended Tegeta coal Minister Zwane joins Guptas in
R600mil advance plus
Court rules nuclear into over R1bn contracts Board members, Johnny Eskom has paid Trillian and then reinstated in interests to Switzerland finalising sale of
R800mil contingency fee –
deal unlawful and channeled to Impulse, in which much reduced interim Dladla R495mil since 2016 connection with Trillian connected Glencore’s Optimun to Tegeta. Flies
R1bn more expensive than
unconstitutional on his step-daughter was a Director Board headed by Acting payments. Eskom admits to Amin back to Dubai on Gupta plane. Other
internally recommended
procedural grounds and had a financial iterest Zethembe Khoza CEO Anoj Singh suspended lying about these payments Alzarooni Gupta allies also in Dubai on Gupta
GE and M&R bids
expense, including Koko and Singh
4 Eskom Inquiry Reference Book Eskom Inquiry Reference Book 5
2017 2017 2017 2017 2017
April May June July AugustREPURPOSING ESKOM
GOVERNANCE
Despite Apartheid’s legacy of low transparency and Molefe as CEO in May and Anoj Singh as CFO in August
accountability in the energy sector, Eskom was able to of the same year. Minister Brown also appointed Ben
establish relatively high levels of technocratic expertise, Ngubane as chairman, despite being publicly renowned
capacity, and competence in the early years of the for his poor performance and actions at the SABC and
democratic transition. This was exemplified in the calibre Land Bank. This was around the same time that the
of the boards (which included CEOs of international Dentons probe into possible governance failures and
utilities) and executives they were able to attract. This other issues at Eskom was prematurely terminated -
endured at least into the mid-2000s, alongside relative with the interim report held back from parliament and
stability in the Department of Public Enterprises and the the public, and then allegedly ‘destroyed’ by the Board
Department of Minerals and Energy. in August 2015. Eskom’s governance structures were
thus impaired – demonstrated in high turnover, volatility,
However, towards the end of the 2000s, political interest
and disharmony in and across the board, executive, and
increased in the board and executive appointments
senior management – during a high-risk period of debt
at SOCs in general, and at Eskom and Transnet in
financed capital expansion. It is during this period, that
particular. Minister of Public Enterprises, Barbara Hogan,
the most serious of the alleged instances of capture of
resisted this emerging undue influence, which likely
Eskom leadership, procurement, and operations appear
accounted for her dismissal only 18 months after her
to have taken place.
appointment.
In July 2017, in the wake of a dramatic wave of
Malusi Gigaba replaced Hogan as Minister of Public
resignations and suspensions, the first qualified audit of
Enterprises in November 2010. In June 2011, Minister
Gigaba instituted the most radical board change in Eskom was released. In addition to exposing R3 billion in
Eskom’s then recent history – all but two non-executive irregular expenditure, the audit revealed the devastating
board members were replaced. Zola Tsotsi was impact that weak and arguably corrupt governance
appointed Eskom chairman and maintained a close has had on the institutional integrity and financial
relationship with Minister Gigaba in these years. Many sustainability of South Africa’s most critical SOC. Given
of Eskom’s most respected executives left during this these findings, it is highly suspect that a qualified audit
period, apparently feeling disenchanted by the changing had not been triggered in earlier years.
institutional culture and early onset of coordinated Rebuilding and reinforcing good governance at Eskom,
corruption and political interference. including through reviewing systems of appointment
This pattern was reiterated in the appointment of the and the structure of the utility itself, will likely be
next board in December 2014, under Lynne Brown as a critical area where recommendations should be
Minister of Public Enterprises. This time the hollowing developed.
out of Eskom’s board and executive governance
appears to have been more severe. Six out of eight Questions on Eskom Governance
appointees had unambiguous connections with the What were the processes for Ministers Gigaba and
Gupta family and questions have been raised about a Brown’s appointments of new Eskom boards in 2011
notable deterioration in the balance of skills, expertise, and 2014 respectively? What were the nature and
and experience on the board. During the course of the content of the Ministers’ interactions with the Eskom
year, Eskom’s two top executives – CEO Brian Dames board? Did Ministers Brown and Gigaba ever give the
and CFO Paul O-Flaherty – also resigned. Then, in board instructions to take any decisions incongruent
the first quarter of 2015, the Eskom executive was with the rules of independence and good corporate
stripped to the bones when Zola Tsotsi suspended four governance? Were board members suitably qualified?
executives before stepping down himself – allegedly How did the Ministers satisfy themselves that the board
at the behest of President Zuma. Minister Brown then appointments they made fulfilled the requirements
made secondments from Transnet, instating Brian from a skills, integrity, experience and transformational
6 Governanceperspective? Were links of the relevant board members and Koko, and Chief Financial Officers T. Molefe and
to the Gupta family known at the time of their Singh, as well as key executives in power generation,
appointment? If so, was this a cause for concern? If not, primary energy and commercial (procurement), play in
what might this imply about the use of due diligence major procurement processes where there have been
checks? What role did the board chairs, Zola Tsotsi and allegations of corruption?
Ben Ngubane, and individual board members play in
procurement processes? Why did certain members Questions for Eskom executives
of Eskom’s board resign in 2016/7 and what processes and managers
governed the appointment of new board members by
Were you put under pressure to approve decisions that
Minister Brown?
you did not feel comfortable with? Did you experience
Did Minister Brown, the Eskom board and management anything untoward taking place that would put
undermine the Eskom War Room, instituted by Cabinet procurement operations in jeopardy of interference? Did
and the Deputy-President to reverse load-shedding and you at any time during your leadership at Eskom take
improve Eskom’s technical and financial performance? instructions from third parties? Did you ever declare
To what extent and to what end were key reports, such your close relationship with these parties? Were you
as the Dentons investigation, withheld from the War involved in the award of any tenders to these parties?
Room, Cabinet, Parliament and the Public? Did members of the executive/board ever exert, or
threaten to exert, power beyond their mandate? Do
What is the role of the Board Tender Committee? What
you know of any cases where sensitive information was
is and is not in their remit? Have these rules changed
shared with the Guptas, associates or others who had
since 2009, including the changes in the rand amount
not been cleared to receive such information?
that they have the discretion to make decisions on? Can
the board override decisions/outcome of the Executive Were you given any instructions by the Guptas? Did you
Procurement Committee? Interrogate instances feel under pressure at any stage to take or comply with
where the Board Tender Committee unduly influenced demands from them, and if so, how did this play out?
processes. What was your understanding at the time of the Gupta’s
relationship with Eskom, and with other SOCs, and the
What were the circumstances of the appointment &
executive? Describe your relationship with the Gupta
resignation of key Eskom executives between 2009 and
family, Salim Essa and senior executives of the Gupta
the present?
companies? Why was sensitive information shared with
What role did Eskom chief executives Maroga, Dames, the Guptas and associates? Did you ever accept any
Matona, and Molefe, acting chief executives Matjila gifts from the Guptas and associates?
Potential Interviewees: Eskom Executives and Managers
CHIEF EXECUTIVES OTHER ESKOM EXECUTIVES PRIMARY ENERGY
Brian Dames (2010-14) Suzanne Margaret Daniels (2015-) Johann Bester
Collin Matjila, acting (2011) Dan Marokane (2010-14) Kiren Maharaj
Tshediso Matona (2014-15) Erica Johnson (2007-2014) Ayanda Nteta
Brian Molefe (2015-16&17) Steve Lennon (2007-2014)
Matshela Koko, acting (2016-17) Abram Masango (2014-) PROCUREMENT
Johnny Dladla (2017-) Mongezi Ntsokolo (2010-) Charles Kalima
Thava Govender (2010-) Pieter le Roux
FINANCE DIRECTORS / CFOS Ayanda Noah (2012-) Mandla Gobingca
Paul O’ Flaherty (2010-14) Kannan Lakmeeharan (2012-2014) Malesela Sekhasimbe
Tsholofelo Molefe (2014-15) Edwin Mabelane (2015-)
Anoj Singh (2015-17) Prish Govender (2016-)
Governance 7REPURPOSING GOVERNANCE
ESKOM BOARD UNDER MALUSI GIGABA
Minister Public Enterprises
November 2010
to May 2014
Director General Advisors to
Public Enterprises the Minister
Tshediso Matona Siyabonga Mahlangu
Dec 2010 – Sept 2014 Dec 2010 – May 2014
Eskom Board Chair Eskom Board Members Eskom CEO
Bernie Fanaroff
Queendy Gungubele
Neo Lesela *
Bejabulile Luthuli *
Mpho Makwana Chwayita Mabude Brian Dames
Nov 2009 – June 2011 Yasmin Masithela July 2010 – March 2014
Collin Matjila *
Boni Mehlomakulu *
Mafika Mkwanazi *
Phenyane Sedibe
Lily Zondo
Zola Tsotsi MJ Husain *
June 2011 – March 2015 MM Matutu
Financial Director
Paul O’Flaherty * Caroline Henry (Acting) Tsholofelo Molefe
Nov 2009 – July 2013 July 2013 – Jan 2014 Jan 2014 – June 2015
8 GovernanceESKOM BOARD UNDER LYNNE BROWN
Minister Public Enterprises
May 2014
to Present
Director General PA to the Minister
Public Enterprises Kim Davids
Richard Seleke May 2014 – July 2017
Nov 2015 to Present
Eskom Board Chair Eskom Board Members Eskom CEO
(including Acting CEOs)
Chwayita Mabude * a
Nazia Carrim * a
Zola Tsotsi
Venete Jarlene Klein a Collin Matjila
to March 2015
(Acting)*
Giovanni Michele Leonardi (Swiss)
April 2014 –
Devapushpum Viroshini Naidoo * a Oct 2014
Pathmanathan Naidoo
Mark Vivian Pamensky a
Ben Ngubane a
April 2015 - Romeo Khumalo b
June 2017 Mariam Cassim a Tshediso Matona
Oct 2014 –
March 2015
New members June 2016:
Zethembe Pulane Molokwane
Khoza (Acting)* Simphiwe Dingaan
June 2017 -
Banothile Makhubela
present Brian Molefe b
Sathiaseelan Gounden April 2015 –
Nov 2016
Financial Director
Matshela Koko
(Acting) c
Nov 2016 –
May 2017
Tsholofelo Molefe Anoj Singh
Jan 2014 – June 2015 Aug 2015 – July 2017
Johnny Dladla
(Acting)
* On tender committee June 2017 -
a. Dismissed/resigned 2017 b. Dismissed/resigned 2016 present
c. (Group Executive for Technology and Commercial/ Generation 2014 - 2016)
Governance 9KOEBERG GENERATORS TENDER
Minister Gigaba Collin Matjila Minister Brown
February: August: Acting ConCourt rules
Eskom begins Westinghouse Tender process Board rejects BTC trip to CEO Collin in Eskom/
tender process awarded bulk of April: Minister reopened, recommendations, Paris, sponsored Matjila pushes Areva’s favour
for 6 Steam tender with board Gigaba scraps Westinghouse again initiates direct by Areva through Areva on procedural
Generators sign off tender process recommended negotiations shareholder award grounds
2010 2011 2011 2012 2013 2013 2014 2016
In 2010, the Eskom board approved the business case a ‘nuclear training’ trip funded by Électricité de France
for extending Koeberg’s lifespan. The plant life extension (EDF) – which had a stake in Areva at the time and the
plan includes the once-off replacement of Koeberg’s six same majority shareholder.
steam generators. A tender, consisting of three parts,
In April 2014, Collin Matjila became Acting CEO of Eskom.
was issued the same year. At the start of 2011, the Eskom
Though the EXCOPS, BTC, and board had not yet reached
board signed off on the Eskom Executive Procurement
agreement on the matter, Matjila and new BTC chair,
Committee’s (EXCOPS) recommendation that Westing-
Neo Lasela, took a decision in favour of Areva, signed
house (US) should be awarded the bulk of the tender –
by Matshela Koko, to Minister Lynne Brown. Areva was
with a smaller part apportioned to Areva (France).
awarded the tender on 12 August, 2014.
Areva then signed letters of intent with Eskom during
Westinghouse challenged the decision through
President Zuma’s visit to France in March 2011. The next
the courts. Initially it succeeded, but ultimately, the
month, newly appointed Minister Malusi Gigaba vetoed
Constitutional Court ruled in Eskom/Areva’s favour on
the board’s earlier decision to award Westinghouse the
(incidental) procedural grounds.
bulk of the tender. This was one of Minister Gigaba’s first
interventions into Eskom procurement. It was followed The cost of this protracted process goes beyond the
by – and has been linked to - Minister Gigaba’s purge of higher price tag of the Areva bid. Given lead times for
the Eskom board just three months later. the manufacture of the generators, the replacement will
no longer be possible in the scheduled window, raising
In 2012, the tender bidding process was reopened. The
concerns around reliability and safety.
EXCOPS again undertook a technical evaluation of bids,
reaching a similar conclusion to that of the 2011 tender
1. Why did Minister Gigaba prioritise this
process. However, Board Tender Committee (BTC)
procurement with Eskom’s board and
chairman, Collin Matjila, curiously blocked EXCOPS
executive management?
from presenting their recommendations to the board –
effectively stalling the official process. 2. Did Collin Matjila and others subvert regular
procurement process in order that Areva
Meanwhile, Matjila initiated a parallel process - be awarded the tender, against the advice of
contracting Swiss firm AF Consult to undertake a bid Eskom staff ?
evaluation review. Following the recommendations of the
3. Which provisions of the PFMA or other
AF Consult report, Westinghouse and Areva were asked
relevant legislation or regulations were
to resubmit bids in July 2013. The board rejected the
breached?
EXCOPS recommendations on this bid too and instead
invited the two companies into parallel negotiations. 4. Have any Eskom board members or staff
received material benefits as a result of this
In December 2013, once negotiations were already tender award?
underway, members of the BTC were flown to France for
10 RefurbishmentNEW AGE BREAKFAST DEAL
Collin Matjila Salim Essa Zola Tsotsi
December: New Eskom spends R12- May: Acting CEO Matjila exceeds November: Auditors December: Matjila leaves
Age Newspaper million on 10 New Age his mandate - signs 3-year state New Age deal is Eskom board, no known
first publication business breakfasts R43-million deal with New Age irregular expenditure remedial action taken
2010 2011–2014 2014 2014 2014
The first edition of the New Age (TNA Media) and executive tried to stop or at the very least improve
newspaper was published in December 2010. Since Eskom’s terms in the deal. Matjila then allegedly acted
then, the newspaper has garnered a reputation for outside of the scope of his authority and against
pushing a specific political agenda. Though the New the council of the executive management and legal
Age neither publishes nor audits its circulation figures, department, by signing an arguably improvident
it has been able to attract millions of rands from contract with New Age in May.
government departments and state owned companies
In November that year, Eskom auditors stated that the
(SOCs) through bulk subscriptions, business breakfast
New Age deal was a reportable irregularity that should
sponsorships, and advertising budgets.
be disclosed in the interim results. A number of board
During Collin Matjila’s tenure as Board Tender members, including chair Zola Tsotsi, motivated against
Committee chairman (2011-2014), Eskom spent R12 disclosing the irregularity. The audit and risk committee
million on 10 TNA business breakfasts – more than reported directly to Minister Lynne Brown on this issue.
the going rate for more established media groups
Collin Matjila did not survive Minister Brown’s
and not including the profit that was made off ticket
replacement of the board in December that year – but
sales. According to publicly available information, then
the New Age deal did remain intact and no remedial
Minister Malusi Gigaba’s advisor Siyabonga Mahlangu
action against Matjila has been pursued.
pushed New Age and TNA deals at SOCs over this
period.
Following Brian Dames’ exit as Eskom CEO, Matjila was
appointed Acting CEO on 28 March, 2014. It has since 1. How and why were the recommendations of
Eskom staff regarding this media contract
come to light, via the #guptaleaks, that this might have
over-turned ?
been the result of mutual business associate, Salim
Essa, circulating his CV to Tony ‘Rajesh’ Gupta and 2. Which provisions of the PFMA or other
Duduzane Zuma just six days before the appointment relevant legislation or regulations were
was made. A month later, the Gupta’s New Age secured breached? Has any remedial action been
a three-year, R43 million business breakfast deal and taken?
a R4 million newspaper subscription package with 3. Did Collin Matjila act beyond his mandate
Eskom. Matjila had initially only broached the idea of in signing the New Age contract? If so, what
a one-year, R14 million deal with the Eskom executive. made this possible?
When the contract ballooned, members of the board
IT & Media 11T-SYSTEMS
Collin Matjila Salim Essa Minister Brown
Eskom exec December: T-systems is not Acting CEO October: November: Load- December: January: Gupta
identifies Eskom launches shortlisted, faces Collin Matjila Recommendations shedding commences, Minister Brown connected
opportunity to IT tender losing Eskom delays tender on IT tender finally board wary of brings in new T-Systems
save R1-bn on IT process business process go to board changing IT contract board contract extended
2013 2013 2014 2014 2014 2014 2014 2015
In 2013, Eskom’s Chief Information Officer (CIO) Sal the tendering of non-core functions, would save then
Laher identified and reported on an opportunity for the financially stressed Eskom around R1 billion, none of these
utility to save almost R1 billion by internalizing core IT recommendations reached the board until Matjila was
functions. T-systems - the serving IT support provider replaced by incoming CEO Tshediso Matona.
- became aware of the risk of losing Eskom’s business
In late October 2014, the IT contract for non-core func-
which, together with Transnet contracts, accounts for
tions was tabled by the Board Tender Committee – just
the majority of the firm’s income. Nonetheless, they were
two months before the T-Systems contract was due to
provided with the opportunity to bid for the smaller, non-
end. On October 31, CIO Laher formally informed T-Sys-
core IT tender that the Eskom Board Tender Committee
tems that Eskom would be dispensing with its services.
(BTC) launched in December 2013. However, T-Systems
was not shortlisted when the bids were evaluated by the Then, in December, Minister Lynne Brown made sweeping
Eskom executive. changes to the board – bringing in at least six Gupta
connected members. In January 2015, the new board
When it became clear that T-systems would likely lose
decided to retain T-Systems. T-systems has since been
out on any Eskom contract, Salim Essa is said to have
connected with Gupta money laundering shell Homix.
approached the firm’s leadership – offering to lobby
Eskom on their behalf. T-systems leadership was already Laher, winner of the 2013 Visionary CIO Award, and two
acquainted with Essa, as they had formed a consortium respected group executives - Erica Johnson and Steve
with Infraco – of which Essa was a director - the year Lennon – left Eskom following the Koeberg, New Age, and
before when bidding for a Transnet contract. Essa had T-System scandals.
been appointed Infraco director by Minister Malusi
Gigaba in 2011. Around this time, Collin Matjila – an Essa
1. Why were the recommendations of Eskom
associate in the dubious 2011 COSATU property deals –
staff on this IT tender not taken into account
was appointed Acting CEO of Eskom. While the role that
despite the large saving that it potentially
Essa may have eventually played is unknown, T-systems
presented?
appeared to have gained the ear of the CEO.
2. What interactions did Matjila have with
Similarly to the Koeberg Steam Generators tender, T-systems and/or Salim Essa?
Matjila appears to have used delaying tactics to impede
3. What were the circumstances surrounding
the awarding of the IT tender to any of the short-listed
Eskom IT manager Sal Laher’s suspension
companies. Over the six months that Matjila was in and resignation?
charge, CIO Laher was arguably sidelined, mainly through
4. Did any Eskom board members or Eskom
a number of audits conducted under Matjila’s direction.
staff benefit materially from this tender
Though each audit ultimately indicated that the proposed
award?
internalization of core IT functions, in conjunction with
12 IT & MediaDUVHA BOILER
Charles Kalima Abrams Masango Edwin Mabelane
June: Eskom
March: August: Insurance December: restarts tender March: Trillian March: Dongfang June: Eskom
Catastrophic evaluation Eskom launches process after recommends awarded tender interdicted from
February: Unit 4 Unit 3 boiler process tender for boiler negotiations Dongfang be despite Eskom exec implementing
turbine accident explosion completed replacement terminated awarded bid & KPMG reports Dongfang contract
2011 2014 2015 2015 2016 2017 2017 2017
Duvha power station has witnessed two major accidents The final tender decision also deviated from the stated
in recent years. In February 2011, the Unit 4 turbine position of the Eskom executive and an external
spun out during a control test and, in March 2014, Unit procurement reviewer (KPMG). In December 2016, both
3’s boiler exploded. Both events caused catastrophic had recommended negotiations should be conducted
damage. While the repair of Unit 4 has not received only with General Electric (GE) and Murray & Roberts
much public attention, multiple controversies around (M&R). Dongfang’s contract is worth R4.8 billion, almost
the Unit 3 boiler explosion, and the subsequent boiler R2 billion more than GE and M&R bids.
tendering process, have been in the spotlight.
It has since emerged that the award was premised
The 2014 boiler explosion has been linked to changes on a late-stage report conducted by Trillian – a firm
in the coal procured for the Duvha plant immediately then majority owned by Gupta associate Salim Essa
preceding the incident. The conveyer belt delivering coal – days before the contract was awarded. The report
from a tied mine had been broken since December 2013 was premised on assumptions – that have since been
and coal was being trucked in as a contingency measure. challenged - around cost escalation, allegedly proposing
Allegedly, this coal did not meet the required specifica- that the fixed-cost Dongfang bid would ultimately be
tions of the plant. As is the case with most coal contracts, cheaper. Eskom also stated that the findings of the
Eskom has not disclosed any information about this coal report were confirmed by SekelaXabiso – a company
supply agreement. The explosion took 600MW offline. implicated in irregular spending at SABC.
Despite a clear imperative to replace the boiler as The matter has since gone to court. On 30 June 2017,
quickly as possible - South Africa entered a period of the High Court granted GE and M&R an interdict to stop
extended load shedding in the second half of 2014 – Eskom from implementing its contract with Dongfang,
Eskom took an inordinate amount of time to conclude whilst they make their judgement on the matter.
the insurance evaluation process (August 2015) and to
then issue and award the tender (December 2015 and
1. Given the court case that has overturned
March 2017, respectively). At the end of this protracted
the validity of awarding the boiler
process, the Eskom Board Tender Committee (BTC)
refurbishment tender to Dongfang, what
inexplicably awarded the contract to Chinese company
were the internal process that led to the
Dongfang – one of the more expensive bids - despite irregular selection of this company as the
previously stating that price would be the determining winning bidder?
factor. Over and above cost considerations, Dongfang
2. Did any Eskom board members or Eskom
scored far lower than the other bidders in the safety,
staff benefit materially from this tender
health and environment category, because it failed to
award?
submit key documents.
Refurbishment 13GUPTA COAL
2013–2017
Brakfontein Coal Mine >
Majuba Power Station
Tegeta again ask for small New Gupta-linked
Glencore seeks to renegotiate After earlier approaches, Tegeta meets contract for coal from their Eskom Board Optimum Coal Mine >
Optimum coal contract to Hendrina with Eskom to obtain coal contract. stockpile. Eskom note appointed by Hendrina & Arnot Power Stations
invoking “hardship clause” Officials say coal is unsuitable environmental non-compliance Minister Brown
Koornforntein Coal Mine >
Komati Power Station
Governace
2013 2014 2014 2014
July May Sept Dec
Negotiations for coal
Eskom Executives Brakfontein contract signed and soon
Coal repeatedly fails Brakfontein begins 2015 contract of 65,000
suspended, Board after increases to 100,000 tons per month
quality tests but coal deliveries to Jan tons per month from
Molefe becomes Chair Tsotsi resigns and (later to 200,000 tons per month) and is
Eskom pays anyway Majuba Brakfontein
acting CEO at Eskom Ngubane takes his place extended from 5 to 10 years
Molefe rejects terms
of agreement and 2015 2015
2015 April March
suspends negotiations May
with Optimum
Eskom CEO Molefe & Chair Koko lifts suspension
Eskom suspends Glencore places Ngubane meet Minister of Brakfontein contract Brakfontein
Brakfontein coal contract Optimum in Ramathlodi to suspend all and suspends scientists continues to fail
Eskom imposes which wasn’t meeting specs business rescue Glencore’s mining licences who did quality tests quality tests New Mines Minister
2015
R2.1 bn fine on July Zwane joins Rajesh
Optimum ‘Tony’ Gupta and Salim
Essa in Switzerland
to meet Glencore and
2015 2015 consummate sale of
Aug Sept Optimum to Tegeta
Eskom eases terms
December deal of Optimum supply
CFO Singh and Head of
Eskom convenes late night Board effective January contract to Hendrina
2015 Commercial, Koko, fly to
Committee meeting to approve Brakfontein sold 1st, though and grants lucrative
Dec Dubai at Gupta expense
R659m pre-payment to Tegeta to Optimum given further to another Gupta payment to be contract to supply
finalise Optimum purchase contract for Arnot company Shiva Coal finalised Arnot (without tender)
Singh approves R1.6bn
Ownership of Optimum guarantee to Tegeta
Holdings, including
Koornfontein, mine
transferred to Tegeta 2016 2016
2016
April Feb Jan Head of Commercial,
Koko, insists Glencore
also sells Koornfontein
to Tegeta
Treasury refuses Eskom’s request Treasury accepts Treasury sends Gupta’s sell Tegeta coal
Tegeta attempts to access mine to extend Tegeta’s Arnot contracts 7 year extension final report to interests to associate
rehabilitation fund illegally until it completed investigation to supply Komati SCOPA Amin Alzarooni
2016 2016 2017 2017
May Aug July August
14 Coal Coal 15GUPTA COAL
Rajesh (Tony) Gupta Duduzane Zuma Salim Essa Ben Ngubane Brian Molefe Matshela Koko
Black gold Koko – who was one of the four suspended executives
– later returned to his position as MD of Technology
Eskom’s largest procurement line item is coal,
and Commercial. The Guptas – seemingly fortified by
purchasing around 120 million tons per annum, worth
the changes in the board and executive - became more
more than R50 billion. It is here that we have seen the
insistent and enterprising. Meanwhile, the new board
most ambitious schemes by the Gupta family to land
and executive appear to have been increasingly willing
lucrative contracts - in part made possible by the lack of
to respond to their demands. The initial Brakfontein
transparency in coal procurement.
contract was subsequently amended, with the coal
When the Gupta family first met Eskom CEO Brian supply agreement increasing from 65,000 to 100,000
Dames in early 2010, they tried to obtain a coal supply and then 200,000 tons per month and the contract
contract to the Lethabo power station, but nothing period extended from 5 to 10 years at a price higher
was concluded as Lethabo was supplied through a than other coal suppliers to the Majuba power station.
secure, long-term contract at competitive prices by There were instances where more coal than specified
the New Vaal mine. Their attention soon shifted to in the contract was delivered, for which they were paid
other opportunities - including the acquisition of the anyway.
Brakfontein coal mine, which was always unlikely to
However, the Brakfontein coal was repeatedly failing
deliver the quality of coal required by Eskom, and then,
quality assurance tests. Because of this, Brakfontein’s
moving up a gear, the acquisition of Glencore’s Optimum
contract was briefly suspended, only to be reinstated
Coal Holdings and coal contracts to supply Eskom’s
by Koko - who then suspended the scientists
Hendrina, Arnot and Komati power stations.
responsible for the negative quality tests. Emails from
Brakfontein: Coal Eskom did the #guptaleaks reveal how Tegeta staff effectively
instructed Eskom staff to sign contracts without any
not need competitive tenders, suggesting that the deals had been
The Guptas purchased the Brakfontein coal colliery in made at a higher level.
Delmas through their company Tegeta in 2011. Despite
Ownership of Brakfontein has since been transferred
this acquisition, their initial offers to supply Eskom’s
to another Gupta company, Shiva Coal, which does not
Majuba power station from Brakfontein were rebuffed.
However, wholesale governance and management meet Eskom’s empowerment criteria.
changes in Eskom turned their fortunes.
Optimum
Following Minister Brown’s new board appointments
The Guptas clearly had greater ambitions and their
in December 2014, four Eskom executives were
sights turned to Optimum Coal Holdings, a company
suspended in early 2015. Though the remaining
owned by Glencore, which had three major assets:
managers and technical staff raised serious concerns
Optimum Coal Mine - which supplies Eskom’s Hendrina
around the quality of Brakfontein coal, environmental
power station, Koornfontein Mine - which supplies
contraventions, as well as the black economic
Eskom’s Komati power station, and an export allocation
empowerment credentials of Tegeta, these were not
at the Richards Bay Coal Terminal.
addressed. The first Brakfontein contract was signed in
March, when Ben Ngubane was appointed board chair. Under Glencore, the cost of production at Optimum
Brian Molefe took over as CEO in April and Matshela Coal Mine had increased to more than R300 per ton.
16 CoalHowever, the mine was locked into a fixed price contract million loan to Tegeta, it was agreed at this meeting
with Eskom of around R150 per ton until 2018, meaning that Eskom would make a pre-payment of this exact
the mine was losing at least R120 million per month. In amount to the company. Phone records obtained by the
July 2013, due to these conditions, Glencore invoked former Public Protector show that there was continual
a “hardship clause”. Following negotiations, Eskom’s communication during this time between CEO Brian
Executive Procurement Committee (EXCOPS) approved Molefe, the Guptas, and one of their senior executives.
a new contract in March 2015 - but final approval was
Three months later, Optimum’s business rescue
deferred to the new acting CEO Brian Molefe, who
practitioners filed a report with the Directorate of
rejected the terms of the agreement and suspended all
Priority Crime Investigation in terms of Section 34 of
negotiations. In July 2015, CEO Molefe then imposed a
the Prevention and Combating of Corrupt Activities
R2.1 billion backdated fine on Glencore for not meeting
Act, alleging that the payment had been directed
coal supply specifications. Around this time, the Guptas, elsewhere and not into Optimum’s accounts to assist
through their company Oakbay, made Glencore an offer with its liquidity, as purported by Eskom. Koko, when
to purchase Optimum. The offer was initially rejected. questioned on Carte Blanche, denied any pre-payment,
In August 2015, Glencore placed the mine in business but when confronted with evidence had to backtrack.
rescue to stave off liquidation. In the same month, The challenge for the Guptas since, has been to earn
Eskom CEO Molefe and board chair Ngubane met with profits from Optimum where its previous owner,
Mining Minister Ramatlhodi to persuade him to cancel Glencore, was incurring losses. Three strategies were
Glencore’s mining rights, while Koko threatened to adopted. First, the Guptas have attempted to sell
review all of Glencore’s coal contracts with Eskom. the valuable Richards Bay export allocation. Second,
#guptaleaks show that Koko also leaked confidential they tried to mitigate the heavy fine that Optimum
Eskom information to the Guptas. Koko subsequently had incurred in the dispute with Eskom around below
insisted that Glencore sell not only the Optimum Coal specification coal supplied to Hendrina. Third, the
Mine, but all the assets in Optimum Coal Holdings, Guptas identified opportunities to increase revenues
including Koornfontein and the export allocation. through further coal contracts. Though the Guptas have
Under this pressure, Optimum’s business rescue not yet finalised the sale of the export allocation, they
practitioners entered into negotiations to sell Optimum have been somewhat more successful in the second and
third strategies. The dispute was referred to arbitration
Coal Holdings. These negotiations were subsequently
and Eskom agreed to reduce the fine from R2.1 billion
facilitated by President Zuma’s new Mining Minister,
to R577 million, while the loss-making contracted
Mosebenzi Zwane, who joined Rejesh ‘Tony’ Gupta
coal supplies to Hendrina were minimised by reduced
and Salim Essa in Switzerland in December 2015 to
electricity generation output at the power station and
finalise the sale with Glencore’s leadership. On his return
alternative, higher priced contracts were made with
journey, Zwane allegedly joined the Guptas on their jet
Eskom to supply Arnot power station, 60 km away.
to Dubai.
The Guptas have acquired major coal mining assets with
However, the Guptas still needed to find the money to
Eskom’s assistance and secured lucrative coal contracts
pay the banks which held Optimum’s debt. They wrote
to power stations, without competitive tendering and
to Koko in December 2015 to confirm an in-principle
where there are better priced alternatives.
agreement for a R1.68 billion pre-payment for coal to be
supplied in the future. During December, both Koko and Komati, Hendrina and Arnot are old power stations
Eskom CFO Anoj Singh were flown to Dubai – allegedly that are due to be shuttered after 2020. Will the Gupta
at the Guptas expense. Singh arranged for a R1.6 billion coal contracts mean that their operational lives will
Eskom guarantee to Tegeta. be extended, despite being amongst Eskom’s most
inefficient and expensive power plants?
The eventual cash assistance to Tegeta for the purchase
of Optimum was finalised at a late night Eskom Board A National Treasury investigation has been submitted to
Committee meeting convened in April 2016. Just hours SCOPA, which recommends sanctions, as well as further
after a consortium of banks refused to advance a R600 forensic investigations.
Coal 17SQUEEZING OUT THE COAL MAJORS
Malusi Gigaba Sipho Nkosi Mark Cutifani Brian Molefe Matshela Koko
(Ex-Exxaro head) (Anglo head)
Kusile: Minister Gigaba Matla: Eskom fails to Arnot: Eskom Arnot: Eskom Majuba: Eskom refuses Arnot, Tutuka,
torpedoes New Largo provide capital as per cost terminates Exxaro/ terminates Exxaro to extend Exxaro Komati: Exxaro
mine with 50 + 1% req. plus agreement for Exxaro Anglo Mafube contract Arnot tied mine Leeuwpan mine contract NBC contracts end
2013 2014 2015 2015 2017 2017
In recent years Eskom has adopted an increasingly its Leeuwpan mine - but Eskom has failed to approve
robust – or even outright uncooperative - attitude in any extension of the contract. In the meantime, Eskom
its negotiations with coal majors, such as Anglo Coal, has agreed to ever increasing supplies from the Gupta’s
Glencore, South32 (ex BHP Billiton) and Exxaro (which, Brakfontein mine, despite their coal not meeting power
until recently, was majority black owned). Eskom’s coal station quality requirements.
power stations were built adjacent to these mines, which
Exxaro supplies Eskom’s Matla power station on a cost-
allowed for long-term, secure, low-priced contracts.
plus contract. However, Eskom again failed to invest
Exxaro has experienced the full force of Eskom’s recent further in the mine, as per the agreement, even though
antipathy to its major coal suppliers, with contracts to historically it was a low-cost producer. As a consequence,
supply Arnot, Majuba, Tutuka, Komati, and Matla power Eskom is trucking in coal at much higher prices.
stations recently terminated, not suitably maintained, or
due to end soon without renewal on the horizon. Exxaro’s contracts to supply Eskom’s Tutuka and Komati
power stations will expire at the end of 2017. Komati is
Exxaro used to supply Eskom’s Arnot power station also being supplied by the Gupta’s Koornfontein mine.
from a captive mine via conveyor belt - Exxaro owns the
mining rights and Eskom the land. In 2006, the Arnot Another example of Eskom squeezing coal majors
power station was upgraded but Eskom failed to secure is Anglo’s New Largo coal deposit, which was the
land rights essential to extending the mine’s operations rationale behind Eskom’s siting of its new Kusile power
and, with reduced output, unit costs of coal increased plant. Heads of agreement were signed between the
substantially. There was also a dispute around when companies and Anglo proceeded with feasibility studies,
the contract would expire. Despite a term sheet being environmental processes, and a mining right application;
agreed in 2013, Eskom terminated the coal supply agree- but then Minister Gigaba imposed a new 50+1 black
ment in September 2015 and the mine was closed with ownership requirement without any official policy,
the loss of 1500 jobs. The mine could still be re-opened legislative or regulatory backing in 2011. The mine remains
but Eskom has expressed no interest in this and has, in- undeveloped and coal is being trucked into Kusile at high
stead, increased its short-term coal contracts with mines cost and considerable risk.
such as the Gupta’s Optimum Coal mine, 60km distant.
Eskom coal procurements offer opportunities for new
In the same year, Eskom also terminated an Arnot supply
black-owned mines. As the shift from long-term contracts
contract from the Mafube mine, which was jointly owned
with coal majors to shorter term contracts with new
by Exxaro and Anglo, even though the cost of this coal
entrants accelerates, transparency is important. It is clear
was substantially cheaper than almost any other supply
that the Guptas have benefited from the shake-down of
agreements, especially the Gupta contract.
low-cost, long-term coal suppliers – arguably without
Exxaro also had a fixed price coal contract, until March supporting the transformation imperative that has made
2016, to supply Eskom’s Majuba power station from this possible.
18 CoalCoal Questions
1. To what extent, and why, did Eskom board members and managers fail to comply with the
PFMA and other Acts and regulations in the awarding of a series of coal contracts to:
• Tegeta’s Brakfontein coal mine to supply Majuba Power Station,
• Tegeta’s Optimum Mine to supply Arnot, and,
• Tegeta’s Koornfontein mine to supply Komati,
at increased volumes, prices, and periods, without competitive tender, and despite some
supplies repeatedly failing quality assurance tests?
2. What were the roles of Rajesh ‘Tony’ Gupta, Salim Essa, Ben Ngubane, Brian Molefe, Matshela
Koko, and involved board sub-committees in the Glencore / Tegeta / Optimum Holdings deal
including:
• the cancellation of the Cooperation Agreement with Glencore;
• levying a fine of R2.1 billion on Glencore (which was substantially reduced later for Tegeta);
• the private commercial negotiations in Switzerland;
• the Department of Mineral Resources issuing mine stoppages and threats to review or
cancel mining licences and coal supply agreements in all of Glencore’s mines;
• refusing to consent to the sale of Optimum to another purchaser (Endulwini Consortium),
meaning that Tegeta emerged as the only remaining entity that wished to make the
purchase;
• Matshela Koko insisting that the sale include not just Optimum Coal but also Koornfontein
and the Richard’s Bay Terminal export allocation;
• Matshela Koko’s leaking of confidential Eskom information to the Guptas;
• Anoj Singh approving a R1.6 billion guarantee with Absa bank to facilitate the Optimum
purchase by Tegeta;
• authorising an extraordinary pre-payment to Tegeta, of R659 million, which was used to
purchase Optimum?
3. What is the nature of relationship between Ben Ngubane, Brian Molefe, Matshela Koko, Anoj
Singh (plus other Eskom board members and managers) and the Guptas? Have they benefited
materially from this relationship?
4. It is clear that Tegeta has benefited from favourable treatment to the detriment of other coal
companies, including those that are fully black owned. Please explain this apparent partial
treatment?
5. Could senior executives from Exxaro, Anglo, Glencore and South32 outline and document
Eskom’s actions in shifting from long-term to short and medium term coal contracts and the
consequences for Eskom’s coal costs and security of supply?
6. Could Ministers Gigaba and Brown explain their roles in decisions pertaining to investment in
coal mines to supply Eskom, including the lack of approval for Eskom to meet its obligations in
cost-plus mines, as well as blocking the development of the New Largo mine to supply Kusile?
7. Could Brian Molefe and Matshela Koko, plus Eskom executives responsible for Primary Energy
and Procurement, explain their actions in terminating contracts with coal majors and instead
favouring particular mines, such as those owned by the Guptas?
8. Have the Guptas actually sold Tegeta or are they, in effect, still beneficiary owners?
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