Social media post about Eskom surged to record numbers this week, with Twitter sentiment overwhelmingly negative. Image supplied
Social media post about Eskom surged to record numbers this week, with Twitter sentiment overwhelmingly negative. Image supplied
Eskom CEO Andre de Ruyter has said that he is doubtful that the embattled supplier will be able to recoup the full R5 billion erroneously paid to one of its contractors due to that company’s involvement in business rescue.
Last week, de Ruyter answered questions at Parliament’s Appropriations Committee and was grilled on several issues, including reports that Eskom is overpaying its suppliers for coal and is hiding the identity of entities who have been erroneously paid out over the last few years.
Eskom grilled in Parliament
In a statement released on Tuesday 2 June, Eskom said that their CEO was asked the following questions:
- One MP enquired whether Eskom was involved in any coal supply contracts that were higher than the average market price of coal.
- Another MP alleged that Eskom had mistakenly made payment of R4 million to an unnamed contractor an wanted to know when the funds would be recovered.
- The third MP increased this amount R5 billion, and wanted to know who this beneficiary of the alleged R5 billion mistaken payment is.
De Ruyter responded by saying that Eskom is indeed of the opinion that they are paying suppliers too much for coal, and said that the missing R5 billion was paid to Tegeta Resources & Explorations, who are currently undergoing business rescue processes and as a result are in no position to pay back the money.
“We have identified seven coal suppliers, who in our opinion are charging Eskom too much for the coal that they supply us. We have commenced negotiations with these seven coal suppliers. And we are making good progress with these suppliers and in due course we will be able to update the committee on these matters.”
“We are involved in the negotiations and we will when we present our comprehensive feedback in due course come back with a timeline as to when we will close these matters as you suggested.”
He said that Eskom was working alongside a number of investigation bureaus and is working towards resolving the dispute surrounding the missing R5 billion.
“In terms of the financial recoveries, again to echo what the Eskom chairperson has indicated, we are very aware that we have an obligation to various organisations, and we are working closely with the SARS, the Special Investigations Unit, the Hawks, the JSE for those companies that are listed on the stock exchange, and the head of investigations at the office of the NDPP.”
But he added that the R5 billion paid to Tegeta is just the tip of the shortfall iceberg.
“We are seeking to recover some R600 million that was unlawfully paid to a company called Trillian, which was in a partnership with McKinsey & Co.”
“We are participating in the business rescue process of Tegeta Resources & Exploration where we have a claim of R5 billion against the business rescue practitioners. We think that based on the available money it will be unlikely be that we will realise the full R5 billion and we will probably receive a significantly smaller amount than that.”
Negotiations with ‘overpriced’ suppliers ongoing
Eskom said that disclosing any more details at this stage would be disingenuous and would potentially hinder the ability of business rescue practitioners to resolve the dispute with Eskom.
“The R5 billion is the total value of Eskom’s claim against Tegeta Resources & Exploration, which is in business rescue,” they said in the statement.
“This contract was concluded years ago, and was set aside by the High Court earlier this year. Eskom is participating in the business rescue proceedings to recover the funds.”
“Negotiations with these seven companies, with which Eskom has binding coal supply contracts, also concluded years ago, and which, in the opinion of the current management team, are inflated above the market price, are at advanced and sensitive stages.”
“At this point, publicly airing detail of these talks would have a detrimental outcome to Eskom’s interests. Parliament and the public will be update on these and other matters as and when the talks progress.”
