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Eskom holds coal talks, has

no deadline for unbundling

SOUTH AFRICA SOUTH Africa’s Eskom is holding talks with contracts have been a key source of corruption
seven private coal suppliers in a bid to renego- allegations in Eskom.
tiate prices, which are at what CEO Andre de De Ruyter has been brought in as a new
Ruyter said were “inflated above market prices.” broom to root out corruption, reduce its
De Ruyter told parliament that the com- ZAR450bn ($26,6bn) debt, improve efficiency
pany was in “advanced talks” with companies and to drive forward the unbundling of the com-
that were charging too much based on very old pany into separate generation, transmissions and
contracts. supply functions.
“We have identified seven coal suppliers who, Indeed, De Ruyter said on June 3 that Eskom
in our opinion, are charging Eskom too much for could miss the target date of 2022 for the unbun-
the coal that they supply us,” said De Ruyter. dling because of legal problems.
A key issue for Eskom and for parliamen- De Ruyter said the first phase to divide the
tarians was claims about a missing ZAR5bn business into transmission, generation and dis-
($294mn) that Eskom is seeking from a bankrupt tribution units, all owned by Eskom Holdings,
coal supplier, Tegeta Exploration & Resources. had progressed well, Reuters reported.
“We are participating in the business res- However, there were legal processes outside
cue process of Tegeta Exploration & Resources its control.
where we have a claim of ZAR5bn ($294mn) “Some of the timelines in the roadmap ... have
against the business rescue practitioners. We been quite aggressive and we have targeted some
think that based on the available money it will slightly relaxed timelines but we are managing
unlikely be that we will realise the full ZAR5bn this very closely.”
($294mn) and we will probably receive a signifi- He could not say when the unbundling pro-
cantly smaller amount than that,” de Ruyter said. cess would be complete
Parliament was concerned that ZAR5bn He also said that he had managed to set up
($294mn) had been fraudulently paid to Tegeta new power purchase and energy supply agree-
by Eskom in order to buy the bankrupt Opti- ments and was running an electricity market
mum and Koornfontein mines. internally in a bid to simulate what would hap-
Tegeta is owned by the Gupta family, which pen once separation was finalised.
has been accused of being involved in corruption As well as breaking up Eskom, the reforms,
during the presidency of Jacob Zuma. outlined in the government’s Road Map in Octo-
However, de Ruyter’s words to parliament ber, call for an end to Eskom’s monopoly status
mean that Eskom is unlikely to recover the whole and the introduction of more competition from
ZAR5bn ($294mn). independent power producers (IPPs) in a bid to
Indeed, coal procurement and over-priced lower generating costs.™

Week 22 04•June•2020 www. NEWSBASE .com P9