Lynne Brown. Picture: TREVOR SAMSON
Lynne Brown. Picture: TREVOR SAMSON

 

The multi-billion Rand coal supply contract between Eskom and Gupta-owned firm Tegeta was "hastily put together by copying and pasting sections from other contracts".

This was revealed in Parliament on Wednesday by senior officials from the National Treasury's Chief Procurement Office during their meeting with the Standing Committee on Public Accounts (SCOPA).

And the matter could now be a subject of a more extensive probe by the Special Investigating Unit (SIU) pending a decision by public enterprises minister Lynne Brown.

The meeting was convened by SCOPA to discuss a PricewaterhouseCooper (PWC) report into the coal supply contract‚ which was signed under controversial circumstances in 2015.

Brown said late on Wednesday that she was considering asking the SIU to conduct a further probe based on the findings of PWC‚ saying their report "does throw up a number of allegations‚" while responding to question in the National Assembly.

Earlier at the SCOPA meeting‚ some ANC backbencher MPs tried to thwart the discussion‚ citing the fact that Eskom was not present and claiming that the report had already been finalised.

But SCOPA chairman Themba Godi would have none of that and the meeting proceeded with no further interruptions.

The PWC report into the Eskom-Tegeta deal states that the contract had been poorly formatted‚ contained irrelevant information and ambiguities and that it appeared to have been "hastily" drafted by "copying and pasting sections from other contracts".

The auditing firm further found that quality criteria set out for coal specification in the contract had been amended later in a letter to Tegeta‚ which made it unenforceable as both parties "should agree to any amendment in writing and no evidence to this effect was supplied.

Treasury official Solly Tshitangano told the committee that the contract‚ initially valued at R3.7 billion for ten years‚ had been signed without a competitive bidding process as it had been concluded under Eskom guidelines that allow for coal to be procured without a tender process if there is a coal shortage.

He said Eskom had approached Treasury again in 2016 to extend the contract to include an additional 10 million tonnes of coal‚ but Treasury "could not support that" because issues around the quality of the coal being supplied had not yet been resolved.

Tshitangano also detailed information that they believed SCOPA should probe further‚ including whether Eskom senior management had ever considered the report and what steps they had taken.

Godi said he believed Eskom should be called to present its case.

"I believe there are a number of issues Eskom needs to clarify‚" he said.

The DA's Natasha Mazzone asked Brown if Tegeta's other R7 billion coal supply contract awarded last year‚ had been issued under correct procedures.

Brown said the R7 billion had been approved by Treasury because Eskom procedures allowed for the modification of contracts.

"The PWC report does not cover this contract and has nothing to do with the original question that I had to answer in the house today‚" she said in response to a follow up question from Mzingisi Dlamini of the EFF.

TMG Digital/TimesLIVE


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