Eskom is considering taking the findings of the public protector’s State of Capture report under review, the power utility said at a media briefing at its Megawatt Park in Johannesburg on Friday.

Non-executive director Pat Naidoo said the company believed it was robbed of the right to be interviewed, despite providing all the information (amounting to 160 boxes) that was requested by former public protector Thuli Madonsela.

The report presented by Madonsela exposed the controversial relationship between Eskom Chief Executive Brian Molefe and the infamous Gupta family.

Regarding Eskom, the report indicated that the power utility had favoured the Gupta-owned Tegeta by awarding a number of coal supply contracts to the company.

Eskom said all its contracts were concluded in line with its procurement policies and that all the transactions had a clear “commercial rationale”.

Lack of coal lead to Tegeta deal

“Eskom had to scavenge for coal during the load shedding period to ensure a continuous energy supply,” Naidoo said. “There was going to be no such thing as load shedding,” he added.

Eskom said that the contract to supply coal to the Arnot and Hendrina power stations was given to Tegeta because it came in at one of the lowest prices of coal per tonne.

When questioned on why the contract was not awarded to Glencore, Eskom Chairman Baldwin Ngubane said that Glencore is part of an old contract, and supplying a contract to the Switzerland-based company was not a favoured option.

Ngubane added that providing the contract to Tegeta was in line with its B-BBEE principles and that Tegeta was one of two companies that had the capacity to supply coal when it was needed.

“Regarding the continued innuendo that Eskom has been giving special favours to Tegeta Exploration and Resources, the Eskom Board stands firmly by the process undertaken by the company to conclude extensions of its coal supply agreements with its suppliers,” Eskom said in a statement.

Tegeta prepayment

Eskom granted Tegeta a prepayment of R659 million for the Arnot coal contract. The report indicated that Tegeta’s conduct and misrepresentations made to the public about the prepayment could amount to fraud.

The Eskom board denied this and said that the power utility had made similar prepayments to other suppliers to guarantee the supply of coal for its power stations. “Several other prepayments to suppliers have been made since 2008 – ranging from R100 million to R 400 million,” Naidoo said.

The prepayment was made on April 11. Later that night, Eskom held an emergency board tender committee meeting to approve the prepayment.

Eskom said the fact that a meeting was held as late as 21:00 should not be surprising as the company operates 24 hours a day and utilises all of those hours.

Naidoo said the latest prepayment was made to Exarro’s Matla mine for R1.8 billion‚ which was approved on 27 September this year and added that the amount provided to Tegeta was fully recovered by Eskom by 31 August this year.

“The procurement complied with Eskom’s procurement policy‚” Naidoo reassured media.

Eskom unclear on Madonsela’s conclusion

Eskom said that it was not clear how Madonsela came to the conclusion that its board acted unethically and unlawfully.

“It is so sad,” Naidoo said. “Eskom has cooperated with the former public protector, but was not afforded a right to reply,” he said once again.

Naidoo firmly believed that “had Thuli Madonsela interviewed anyone from Eskom, her findings would have been different”, and concluded by informing media that the power utility’s Board of Directors was seeking legal counsel to take Madonsela’s report on review.