Matshela Koko. Picture: FREDDY MAVUNDA
Matshela Koko. Picture: FREDDY MAVUNDA

When the Gupta-owned Tegeta Resources bought Optimum coal mine from Glencore a year ago, the transaction had everyone trying to figure where the money would be made.

Optimum was tied into a loss-making contract with Eskom to supply Hendrina power station at a price of R150 a tonne until 2018. Previous owner Glencore has said that the break-even price for the mine was R400 a tonne.

The mine had also just been fined R2bn by Eskom for delivering substandard coal.

Following these punitive measures from Eskom, the mine applied for business rescue.

It was these conditions, which were unusually harsh, that caused then public protector Thuli Madonsela to conclude in her State of Capture report that Eskom intentionally pushed Optimum into business rescue, presumably to make it available for purchase by Tegeta.

Now we have the news Eskom and Tegeta have settled the matter of the fine

Tegeta bought Optimum from its creditors on the eve that it received notice it would shortly lose banking facilities on the suspicion of involvement in money laundering.

When questioned about the transaction by journalists and analysts, Eskom CE Brian Molefe insisted Tegeta would get no special favours. The Hendrina contract would stand, he said, and so would the R2bn fine, which would not be waived.

But slowly and surely, it has become clear exactly how the Guptas together with the Eskom top management colluded to make this unworkable deal work.

First came the award of a fabulously lucrative supply contract for Optimum for another Eskom power station, Arnot, at coal prices easily as high as the export parity price. Incidentally, the Arnot supply contract became available only after Eskom turned down proposals from Exxaro, which had wanted a partnership with Eskom to open new areas for mining.

On Eskom’s refusal, Exxaro closed its mine, leaving coal in the ground and workers jobless. Next came the disclosure Eskom had prepaid Tegeta R659m for the Arnot coal. Eskom’s acting CE Matshela Koko, when asked about this in an interview with M-Net’s Carte Blanche, denied the prepayment. When confronted with a document authorising it and bearing his signature, Koko said he had made a mistake.

Now we have the news, which came to light only on Monday, that Eskom and Tegeta have settled the matter of the fine through private arbitration. Eskom says "it is not at liberty to disclose the agreement".

Coming as it does, after a series of special favours to Tegeta, it will be no surprise should we learn that Eskom has again bent over backwards to help its special friend, the Guptas.

If we are to be reassured that this has not happened this time around, Koko should take us into his confidence and disclose the magnitude of the new penalty. If the agreement prohibits him from doing so, it is Public Enterprises Minister Lynne Brown to whom we must turn for some transparency.

Asked on Tuesday for her view on the secrecy of the agreement, Brown refused to reply. Sadly, that too comes as no surprise.

While Brown is good at making statements that could be interpreted as critical of the Guptas — she has said, for instance, "bring me the evidence and I will investigate" — the truth is she has done nothing to stop corruption at Eskom.

Koko, who now stands accused of sending lucrative contracts to a firm in which his stepdaughter just happened to be a director, has not been suspended. Neither has Brown acted on the Dentons report, the PwC report or the investigation of all contracts above R10m by the Treasury.

In short, she has done an excellent cover-up job and should be ashamed at how she has betrayed SA.

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