Malusi Gigaba and Eskom CEO Brian Dames address the media in February 2014, when Gigaba was public enterprises minister. PICTURE: PUXLEY MAKGATHO
Malusi Gigaba and Eskom CEO Brian Dames address the media in February 2014, when Gigaba was public enterprises minister. PICTURE: PUXLEY MAKGATHO

Home Affairs Minister Malusi Gigaba has denied any involvement, during his tenure as minister of public enterprises, in an alleged attempt by one of the Gupta brothers to secure coal contracts from Eskom and to build another coal power station.

He has also insisted he did his best to prevent Telkom and Eskom from sponsoring The New Age newspaper's business breakfasts but said the decision was ultimately up to the state-owned companies' boards.

Gigaba was public enterprises minister between November 2010 and May 2014, and appeared before the parliamentary inquiry into state capture on Tuesday to answer allegations that he facilitated state capture during his tenure as minister of public enterprises.

He addressed an allegation made by former Eskom CEO Brian Dames that his adviser at the time, Siyabonga Mahlungu, had arranged a meeting between Dames and one of the Gupta brothers to discuss coal contracts for the Lethabo coal station in the Free State and requests for another coal power station to be built in the Free State after Medupi and Kusile were completed.

This new coal power station was referred to as “coal three”.

Gigaba said he had no knowledge of this meeting or the requests that were made at it.

Addressing the testimony by Dames about the alleged degeneration of the new Eskom board under chairman Zola Tsotsi that was appointed by Gigaba, Gigaba said that except for two members, the remainder of the Eskom directors had been on the board for longer than nine years.

He felt the board needed to be “refreshed” after a presentation was made to him by departmental officials.

“I was of the view that the board needed rotation in order to comply with good corporate governance,” Gigaba told MPs.

Gigaba said he was reluctant to let Dames leave Eskom and agreed to his resignation in 2013 only “when it became clear that the tensions between him and Mr Tsotsi could not be resolved”.

With regard to reasons why the Koeberg steam generator tender had to be restarted, Gigaba explained that this was necessary because Eskom had proceeded to accept a contractor and was ready to sign the contracts even though he had not yet given his approval as required. He refused to merely rubber-stamp the contract presented to him.

Expensive breakfasts

Gigaba also told the inquiry that he was “upset” by The New Age’s requests to Transnet and Eskom in 2011 for them to sponsor business breakfasts.

At the time the newspaper was owned by the Gupta family, which derived significant income from the business breakfasts, which were covered by the SABC and addressed by government ministers.

He said he was upset because the sums of money were large, even though they were below the amount requiring his approval.

Expenditure on the sponsorships was within the purview of the boards of the state-owned companies.

“I felt it was inappropriate that such large sums of money were being spent on breakfast sponsorships, especially in the midst of such large-scale build projects that were being undertaken,” Gigaba said.

“I issued instructions to the chairs of the state-owned companies that all such sponsorship requests and requests for information (about the state-owned companies) must be routed through the department (of public enterprises) in the future.”

By 2013 the problem had escalated to such an extent that then public protector Thuli Madonsela initiated an investigation into the matter, focusing on alleged fruitless and wasteful expenditure by Eskom, Transnet, SABC and Telkom.

Madonsela also probed the allegation that the department exercised undue influence on these companies in deciding to sponsor the New Age breakfasts.

Gigaba said that contrary to attempting to promote the breakfasts, he had tried to resist them.

“I did the best I could to curb such requests for sponsorships but the reality is the accounting authorities of the boards of state-owned companies are solely responsible for preventing fruitless and wasteful expenditure.

“The boards of state-owned companies were therefore solely responsible for having measures in place to ensure that the sponsorship of the New Age breakfasts were consistent with approved policies.”

Gigaba said he asked the state-owned companies to co-operate with the public protector’s inquiry and provide Madonsela with the information she required.