Gupta-owned coal supplier rakes in cash while Eskom struggles

Gupta-owned coal supplier Tegeta has raked in billions while failing to meet its domestic delivery requirements to Eskom, according to a report in the Sunday Times.

The company’s largest mine, Optimum, reportedly made up to R4 billion in coal exports over the last two years by selling to the Gupta-linked asset management firm Centaur Ventures, which is based in Bermuda.

Optimum sold 1.9 million tons of coal, which was destined for Eskom’s Hendrina power station, to Centaur at an inflated average price of R1,075 per ton – seven-times more than the R150 per ton Eskom was paying for the coal.

Eskom has failed to enforce stringent contractual obligations against Optimum, with the coal supplier only fulfilling its monthly quota in four out of 20 months.

Shortages

Coal shortages at power stations have almost resulted in the re-implementation of load shedding, with Eskom seeking aid from Treasury to avert the crisis.

Eskom has also stated that Tegata was paid R7 million in September last year for 37,000 tons of coal that was never delivered.

Speaking to the Sunday times, Eskom said it could not provide comment due to an ongoing investigation of the issue.

An internal review at Eskom recently found the company had also spent R1.9 billion with consulting firm McKinsey & Co from 2005 to 2017.

The consulting firm reportedly benefitted from a lack of controls at Eskom, and the large sum of money was linked to executives at the firm forming a relationship with its BEE partner, the Gupta-associated Trillian.

Now read: Inside the coal supply emergency at Eskom

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Gupta-owned coal supplier rakes in cash while Eskom struggles