ESKOM INQUIRY REFERENCE BOOK - A Resource for Parliament's Public Enterprises Inquiry - UCT Graduate School of Business
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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.
PREFACE
In August 2017, Parliament’s Public Enterprises Committee will begin its inquiry into the alleged abuse
of public resources in three of South Africa’s state owned enterprises: Eskom, Transnet and Denel. The
Committee will be under considerable pressure to drive a targeted inquiry that ultimately brings to light
the information necessary to more fully understand the manner in which key institutions may have been
corrupted and to make recommendations around strengthening and reforming governance in the future.
This reference book, which has been independently produced by the authors, sets out to provide an
accessible, concise, and fact based account of some, but not all, of the alleged instances of corruption
at Eskom, which taken together are what have led to considerable concern among ordinary South
Africans and parliamentarians, ultimately resulting in this inquiry. This booklet touches on Eskom’s coal
procurement controversies (squeezing out the coal majors and making room for the Gupta-linked Tegeta
and Optimum ‘heist’), large refurbishment contracts (such as the Koeberg steam generators and Duvha’s
Unit 3 boiler), new build sub-contracts (Impulse), advisory services (Trillian), ICT (T-Systems), and media
(New Age). Suggested areas for further investigation are flagged, as well as key lines of questioning and
possible recommendations.
The aim of this reference book is to assist Committee members with objective, research-based facts on
some of the deeply complex challenges facing the power utility. 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.
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
It has been a year since then Public Protector Thuli nor unconnected, as would be the case with generalised
Madonsela’s State of Capture report first provided corruption. Instead, a clear political project has emerged,
a deep analysis of systemic corruption perpetrated whereby governance structures are repurposed through
through state owned companies (SOCs), shedding the centralisation of decision-making power, infiltrated
light on the modus operandi of a network of individuals by certain incompetent or corrupt individuals, and
allegedly connected to President Jacob Zuma. The reinforced through the establishment of new formal and
past year has also witnessed the rallying of civil society, informal institutions that foster fear and mistrust, and
investigative journalists, academia, and concerned erode institutional capacity. There is evidence that such
citizens, who have come together through groups practices have been intentionally waged across a range
such as the South African Council of Churches (SACC), of government institutions and within SOCs - the full
the State Capacity Research Project (SCRP), and the ramifications of which have yet to be felt.
Organisation Against Tax Abuse (OUTA). This inquiry is critical, given the important role that
Most recently, the Portfolio Committee on Public Eskom plays in powering the economy and the extent
Enterprises has initiated an Inquiry into allegations of to which a compromised utility might expose the fiscus
to potentially disastrous financial risk. The inquiry
governance failure and the abuse of public resources at
will be challenging, given the complexity of Eskom’s
Eskom, Transnet, and Denel.
governance structures and lack of clarity around its
An overwhelming and growing body of evidence, inner workings, which could be used by complicit parties
including that contained in the #guptaleaks, suggests to obstruct justice.
that the political power vested in the President, certain
Ministries, and the boards and executives of SOCs has This booklet sets out to increase
been misused to benefit the interests of connected
clarity around the primary forays
individuals and entities – most prominently the Gupta
family. This has been to the detriment of the functioning
that have been made into Eskom and
of Government and those entities within the ambit to distil the most urgent and relevant
of state governance. We also now know that such questions emerging from existing
instances of the misuse of power are neither random knowledge and research.
2 Eskom Inquiry Reference BookSETTING SIGHTS ON ESKOM
Eskom is by far the largest State Owned Company (SOC) which totals around R140 billion per annum (excluding
in South Africa, with annual revenues nearly three times finance costs, depreciation and taxes). The operating
that of Transnet and six times SAA’s. This has made the budget includes maintenance, refurbishment, staffing
utility vulnerable to corrupt interests. costs, consulting and service contracts, but the
largest component is for primary energy purchases
Eskom is dominant in the power sector. It generates
- specifically coal, which is used to generate the bulk
more than 90 per cent of South Africa’s electricity,
of Eskom’s power. It is here that the most blatant
controls the entire national high voltage transmission
acts of corruption appear to have been perpetrated
grid, and distributes around half of electricity directly to
- through the awarding of over-priced coal contracts,
consumers, with the remainder going to municipalities.
Eskom’s assets are valued at R710 billion and its capital the squeezing out of incumbent coal majors, and the
expenditure programme amounts to around R350 billion questionable acquisition of coal mines by the Gupta
over the next five years. family, financed by Eskom.
Eskom is building amongst the largest coal power Average coal costs are now close to R400 per ton, up
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 by
commissioning of these power stations contributed to corruption.
severe load-shedding with huge costs to the economy Burgeoning costs, arguably propelled by rent-seeking
in recent years. In addition, these power stations have and corruption, have resulted in electricity tariffs
cost more than double their original budgets. There increasing by more than 400% over the past decade
were more than 40 construction contracts for each
while electricity services have deteriorated. The effects
power station, none of them in the public domain, with
of this on the South African economy and prospects
allegations of inflated prices and corruption, although
for economic development and transformation hardly
the veracity of many of these claims remains unproven.
need to be stated and reinforce the urgent need for
What has come to light, however, is evidence that would governance and structural reforms at the utility.
suggest corruption in Eskom’s operating expenditure -
Eskom’s assets, revenue and expenditure 2016/7 (Rands)
Assets 710 009 000 000 (710 billion)
Capital expenditure 55 823 000 000 (55.8 billion)
Revenue 177 136 000 000 (177 billion)
Net operating expenses 139 604 000 000 (139.6 billion)
Coal purchases 50 100 000 000 (50.1 billion)
Staffing costs 33 178 000 000 (33 billion)
Other expenditure 25 239 000 000 (25.2 billion)
Source: Eskom Annual Financial Report 2017
Eskom Inquiry Reference Book 3GENERATING CONTROVERSY
2009–2017
Governance Advisory
Respected Public President Minister Gigaba
Eskom CEO Jacob Maroga All Eskom Enterprises Minister Zuma intervenes Minister Glencore invokes Coal Maintenance/
resigns having lost President procurment Barbara Hogan pushed appoints in Koeberg Gigaba ‘hardship clause’ Repair/
Jacob Zuma Zuma’s protection, Eskom cetralised out, 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 welcomed in of Group interest in SOC Board of Public Turbine Westinghouse - all but two Chairman of agreements. Price BTC - Board Tender
IT & Media
South Africa acceptable to the ANC as Eskom CEO Commercial Appointments Enterprises destroyed aside replaced Eskom Board negotiations begin Committee
BTC, headed by
2013 Collin Matjilla
2009 2009 2010 2010 2010 2011 2011 2011 2013 Aug
announces IT tender
May Nov July Sept Nov March April June July
Zola Tsotsi appoints BTC Paris trip
Acting CEO Matjila signs R43mil deal 2013
President Zuma Collin Matjilla Acting sposored by Areva
Previous Public President Zuma Eskom awards Matshela Koko with Gupta’s New Age Dec
appoints Lynne CEO Eskom, subverting Shareholder
Enterprises DG signs Nuclear Koeberg steam takes over Group
Tshediso Matona deal with generator tender Brown Minister of Technology & Acting CEO Matjila sabotages IT tender contract 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 2014 Duvha Boiler Explodes
2014 2014 2014
Eskom signs coal contract Allegedly under
Sept Aug May April
with Gupta owned Tegeta pressure from
Nationwide Brakfontein - frequent President Zuma,
2014
load-shedding IT tender scrapped, Eskom recieves extensions of contract Zola Tsotsi’s Board Ben Nugubane is CEO Brian Molefe refuses
Nov
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
extended and improper conduct over as Eskom CEO rescue later in the year Anoj Singh seconded
Minister Brown flips 2014 converted to equity specifications pressured to resign
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 Nuclear Public Protector transfers Trillian R495mil for contracts, relaxed terms
Minister Brown instructed to
has no contractual of the State Capture Procurement releases State Capture funds to buy consulting services, on supply agreements, 2015
Dec appoint Richard Seleke DG of
engagements with Report, Matshela Koko shifted to Report – Eskom Optimum including R30.7mil and on April 13 a
Public Enterprises
Trillian takes over as Acting CEO Eskom appears 913 times 14 April paid 14 April prepayment of R659mil
Trillian conduts “high-level President Zuma fires Finance
cost benefit analysis over Minister Nhlanhla Nene,
a two-day period” in inserting Des van Rooyen
which Dongfang emerges
as the preferred bidder for 2016 2016 2016 2016 2016
Dec Nov Oct April Starts Jan President Zuma appoints Pravin
Duvha boiler Gordhan Finance Minister under
pressure across Government
Dongfang awarded tender 2017 Matshela Koko steps down as Eskom Minister Brown forces Anoj Singh
of R4bn, including R600mil March Constitutional Court rules CEO pending investigation into over resignation of some Board admits that Minister Zwane joins Guptas in
advance plus R800mil nuclear deal unlawful R1bn contracts channeled to Impulse, in members, much reduced Eskom has paid Switzerland to consumate sale of
contingency fee – R1bn and unconstitutional on which his step-daughter was a Director interim Board headed by Johnny Dladla Trillian R495mil Anoj Singh Glencore’s Optimun to Tegeta. Flies
more expensive than procedural grounds and had a financial iterest Zethembe Khoza Acting CEO since 2016 suspended back to Dubai on Gupta plane. Other
internally recommended 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
April May June JulyREPURPOSING ESKOM
GOVERNANCE
Despite Apartheid’s legacy of low transparency and himself – allegedly at the behest of President Zuma.
accountability in the energy sector, Eskom was able to Minister Brown then made secondments from Transnet,
establish relatively high levels of technocratic expertise, instating Brian Molefe as CEO in May and Anoj Singh
capacity, and competence through the years of the as CFO in August of the same year. Minister Brown also
democratic transition. This was exemplified in the calibre appointed Ben Ngubane as chairman, despite being
of the boards (which included CEOs of international publicly renowned for his poor performance and actions
utilities) and executives they were able to attract. This at the SABC and Land Bank. Eskom’s governance
endured at least into the mid-2000s, alongside relative structures were thus impaired – demonstrated in high
stability in the Department of Public Enterprises and the turnover, volatility, and disharmony in and across the
Department of Minerals and Energy. board, executive, and senior management – during a
high-risk period of debt financed capital expansion. It is
However, towards the end of the 2000s, political interest during this period, that the most serious of the alleged
increased in the boards and executive appointments of instances of capture of Eskom leadership, procurement,
SOCs in general and in Eskom and Transnet, in particular. and operations took place.
Minister of Public Enterprises, Barbara Hogan, resisted
this emerging undue influence, which likely accounted In July 2017, in the wake of a dramatic wave of
for her dismissal only 18 months after her appointment. resignations and suspensions, the first qualified audit of
Eskom was released. In addition to exposing R3 billion in
Malusi Gigaba replaced Hogan as Minister of Public irregular expenditure, the audit revealed the devastating
Enterprises in November 2010. In June 2011, Minister impact that weak and arguably corrupt governance
Gigaba instituted the most radical board change in has had on the institutional integrity and financial
Eskom’s then recent history – all but two non-executive sustainability of South Africa’s most critical SOC.
board members were replaced. Zola Tsotsi was
Protecting the governance of Eskom, through reviewing
appointed Eskom chairman and maintained a close
systems of appointment and the structure of the
relationship with Minister Gigaba through this period.
utility itself, is thus likely to be a key avenue where
It was not only the loss of so many experienced board
recommendations will be critical going forward.
members that contributed to a skills and expertise drain
at the utility, however. Many of Eskom’s most respected
executives left during this period, apparently feeling
Questions on Eskom Governance
disenchanted by the changing institutional culture and What were the processes for Ministers Gigaba and
early onset of coordinated corruption and political Brown’s appointments of new Eskom boards in 2011
interference. and 2014 respectively? What were the nature and
content of the Ministers’ interactions with the Eskom
This pattern was reiterated in the appointment of the board? Did Ministers Brown and Gigaba ever give the
next board in December 2014, under Lynne Brown as board instructions to take any decisions incongruent
Minister of Public Enterprises. This time the hollowing with the rules of independence and good corporate
out of Eskom’s board and executive governance appears governance? Were board members suitably qualified?
to have been more severe. Six out of eight appointees How did the Ministers satisfy themselves that the board
had unambiguous connections with the Gupta family appointments they made fulfilled the requirements
and questions have been raised about the apparent lack from a skills, integrity, experience and transformational
of balance in skills, expertise, and experience on the perspective? Why were members a) associated
board. During the course of the year, Eskom’s two top with the Guptas and/or b) with dubious histories in
executives – CEO Brian Dames and CFO Paul O-Flaherty previous positions granted access to Eskom through
– also resigned. Then, in the first quarter of 2015, the board appointments? Were links of the relevant board
Eskom executive was stripped to the bones when Zola members to the Gupta family known at the time of their
Tsotsi suspended four executives before stepping down appointment? If so, was this a cause for concern? If not,
6 Governancewhat might this imply about the use of due diligence power generation, primary energy and commercial
checks? What role did the board Chairs, Zola Tsotsi and (procurement), play in major procurement processes
Ben Ngubane, and individual board members play in where there have been allegations of corruption?
procurement processes? Why did certain members
of Eskom’s board resign in 2016/7 and what processes Questions for Eskom executives
governed the appointment of new board members by
and managers
Minister Brown?
Were you put under pressure to approve decisions that
Did Minister Brown, the Eskom board and management you did not feel comfortable with? Did you experience
undermine the Eskom War Room, instituted by Cabinet anything untoward taking place that would put
and the Deputy-President to reverse load-shedding and procurement operations in jeopardy of interference? Did
improve Eskom’s technical and financial performance, you at any time during your leadership at Eskom take
and to what extent were key reports, such as the instructions from third parties? Did you ever declare
Dentons investigation withheld from the War Room and
your close relationship with these parties? Were you
Cabinet?
involved in the award of any tenders to these parties?
What is the role of the Board Tender Committee? What Did members of the executive ever exert, or threaten to
is and is not in their remit? Have these rules changed exert, power beyond their mandate? Do you know of any
since 2009, including the changes in the rand amount cases where sensitive information was shared with the
that they have the discretion to make decisions on? Can Guptas, associates or others who had not been cleared
the board override decisions/outcome of the Executive to receive such information?
Procurement Committee? Interrogate instances
Were you given any instructions by the Guptas? Did you
where the Board Tender Committee unduly influenced
feel under pressure at any stage to take or comply with
processes.
demands from them, and if so, how did this play out?
What were the circumstances of the appointment & What was your understanding at the time of the Gupta’s
resignation of key Eskom executives between 2009 and relationship with Eskom, and with other SOCs, and the
the present? executive? Describe your relationship with the Gupta
What role did Eskom chief executives Maroga, Dames, family, Salim Essa and senior executives of the Gupta
Matona, and Molefe, acting chief executives Matjila companies? Why was sensitive information shared with
and Koko, and Chief Financial Officers Tsholofelo the Guptas and associates? Did you ever accept any
Molefe and Anoj Singh, as well as key executives in gifts from the Guptas and associates?
Potential Interviewees: Eskom Executives and Managers
CHIEF EXECUTIVES OTHER ESKOM EXECUTIVES PRIMARY ENERGY
Brian Dames (2010-14) Matshela Koko (2010-17) 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 Dadla (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 *
Chwayita Mabude
Mpho Makwana 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*
Zethembe Wilfred Khoza*
Nazia Carrim*
Suzanne Margaret Daniels
Zola Tsotsi Venete Jarlene Klein
to March 2015 Collin Matjila (Acting)*
Giovanni Michele Leonardi April 2014 – Oct 2014
(Swiss)
Devapushpum Viroshini Naidoo*
Pathmanathan Naidoo
Mark Vivian Pamensky
Romeo Khumalo
Ben Ngubane Mariam Cassim Tshediso Matona
April 2015 - June 2017
Oct 2014 – March 2015
Financial Director
Brian Molefe
April 2015 – Nov 2016
Tsholofelo Molefe Anoj Singh
Jan 2014 – June 2015 Aug 2015 – July 2017
* On tender Committee
Matshela Koko (Acting)**
** (Group Executive for Technology and Commercial/ Generation 2014 - 2016) Nov 2016 – May 2017
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 Lesela 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
1. Why did Minister Gigaba prioritise this
tender process. However, Board Tender Committee
procurement with Eskom’s board and
(BTC) 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 the
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 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) When the contract ballooned, members of the board
newspaper was published in December 2010. Since and executive tried to stop him. Matjila then allegedly
then, the newspaper has garnered a reputation for acted 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 the contract with New Age in
it has been able to attract millions of rands from 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 just 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 the New Age and TNA deals with SOCs over this
period.
Following Brian Dames’ exit as Eskom CEO, Matjila was 1. How and why were the recommendations of
appointed Acting CEO on 28 March, 2014. It has since Eskom staff regarding this media contract
come to light, via the #guptaleaks, that his appointment over-turned ?
might have been the result of mutual business associate, 2. Which provisions of the PFMA or other
Salim Essa, circulating his CV to Tony ‘Rajesh’ Gupta and relevant legislation or regulations were
Duduzane Zuma just six days before the appointment breached? Has any remedial action been
was made. A month later, the Gupta’s New Age secured taken?
a three-year, R43 million business breakfast deal and 3. Did Collin Matjila act beyond his mandate
a R4 million newspaper subscription package with in signing the New Age contract? If so, what
Eskom. Matjila had initially only broached the idea of made this possible?
a one year, R14 million deal with the Eskom executive.
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 recommendations reached the board until Matjila was
Laher identified and reported on an opportunity for the replaced by incoming CEO Tshediso Matona.
utility to save almost R1 billion by internalizing core IT
In late October 2014, the IT contract for non-core
functions. T-systems - the serving IT support provider
functions was tabled by the Board Tender Committee
- became aware of the risk of losing Eskom’s business
– just two months before the T-Systems contract was
which, together with Transnet contracts, accounts for
due to end. On October 31, CIO Laher formally informed
the majority of the firm’s income. Nonetheless, they were
T-Systems that Eskom would be dispensing with its
provided with the opportunity to bid for the smaller, non-
services.
core IT tender that the Eskom Board Tender Committee
(BTC) launched in December 2013. However, T-Systems Then, in December, Minister Lynne Brown made sweeping
was not shortlisted when the bids were evaluated by the changes to the board – bringing in at least six Gupta
Eskom executive. connected members. In January 2015, the new board
decided to retain T-Systems. T-systems has since been
When it became clear that T-systems would likely lose
connected with Gupta money laundering shell Homix.
out on any Eskom contract, Salim Essa is said to have
approached the firm’s leadership – offering to lobby Laher, winner of the 2013 Visionary CIO Award, and two
Eskom on their behalf. T-systems leadership was already respected group executives - Erica Johnson and Steve
acquainted with Essa, as they had formed a consortium Lennon – left Eskom following the Koeberg, New Age, and
with Infraco – of which Essa was a director - the year T-System scandals.
before when bidding for a Transnet contract. Around
this time, Collin Matjila – an Essa associate through 1. Why were the recommendations of Eskom
COSATU property deals – was appointed Acting CEO of staff on this IT tender not taken into account?
Eskom. Whatever role Essa may have played, T-systems Which provisions of the PFMA or other
appeared to have gained the ear of the CEO. relevant legislation or regulations were
breached and who is being held to account?
Similarly to the Koeberg Steam Generators tender,
Matjila appears to have used delaying tactics to impede 2. What interactions did Matjila have with
the awarding of the IT tender to any of the short-listed T-systems and/or Salim Essa?
companies. Over the six months that Matjila was in 3. What were the circumstances surrounding
charge, CIO Laher was arguably sidelined, mainly through Eskom IT manager Sal Laher’s suspension
a number of audits conducted under Matjila’s direction. and resignation?
Though each audit ultimately indicated that the proposed 4. Did any Eskom board members or Eskom
internalization of core IT functions, in conjunction with staff benefit materially from this tender
the tendering of non-core functions, would save then award?
financially stressed Eskom around R1 billion, none of these
12 IT & MediaDUVHA BOILER
Chales 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 2017 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 Optimum After earlier approaches, Tegeta meets contract for coal from their Eskom Board Optimum Coal Mine >
coal contract to Hendrina invoking with Eskom to obtain coal contract. stockpile. Eskom note appointed by Hendrina & Arnot Power Stations
“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 Tegeta contract increases to 100,000
quality tests but coal deliveries to Jan tons per month from
Molefe becomes Chair Totsi resigns and tons per month (later to 200,000 tons per
Eskom pays anyway Hendrina Brakfontein
acting CEO at Eskom Ngubane takes his place month) and 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 Brakfontein Glencore places Ngubane meet Minister of Brakfontein contract Brakfontein
coal contract which wasn’t Optimum in Ramathlodi to suspend all and suspends scientists continues to fail
Eskom imposes 2015 meeting specs business rescue Glencore’s mining licences who did quality tests quality tests New Mines Minister
R2.1 bn fine on July Zwane joins Rajesh ‘Tony’
Optimum Gupta and Salim Essa
in Switzerland to meet
Glencore and consummate
2015 2015 sale of Optimum to Tegeta
Aug Sept
CFO Singh and Head of
Eskom convenes late night
2015 Commercial, Koko, fly to
Board committee to approve Brakfontein sold Eskom eases terms of Optimum supply
Dec Dubai at Gupta expense
R659m pre-payment to Tegeta Optimum given further to another Gupta contract to Hendrina and grants lucrative
to finalise Optimum purchase contract for Arnot company Shiva Coal contract to supply 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
Tegeta attempts to Treasury refuses Eskom’s request Treasury accepts Treasury sends
access mine rehabilitation to extend Tegeta’s Arnot contracts 7 year extension final report to
fund illegally until it completed investigation to supply Komati SCOPA
2016 2016 2017
May Aug July
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 ambitious. 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 supply contracts were made
journey, Zwane allegedly joined the Guptas on their jet
with 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 R1.68bn 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
(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-
had 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 and has, instead, undeveloped and coal is being trucked into Kusile at high
increased its short-term coal contracts with mines such cost and considerable risk.
as the Gupta’s Optimum Coal mine, 60km distant. In
Eskom coal procurements offer opportunities for new
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:
• 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 frustrating investment in coal
mines to supply Eskom, including 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?
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