Eskom left Optimum out in the cold, says former business rescue practitioner | Fin24
 
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Eskom left Optimum out in the cold, says former business rescue practitioner

Mar 13 2019 15:15
Ntwaagae Seleka

A former business rescue practitioner at Optimum Coal Mine has accused Eskom of providing little cooperation as he tried to turn the operation around.

On Wednesday, Piers Marsden told the commission of inquiry into allegations of state capture headed by Justice Raymond Zondo that Eskom offered no reciprocation in his efforts to rescue the controversial mine.

Marsden said he arrived at the mine in 2015 and established that it was held by Optimum Coal Holdings (OCH), among other companies.

"OCM (Optimum Coal Mine) had a contract to supply Eskom with coal from 2015 until 2018.

"OCM was experiencing significant loss of cash monthly. It had exhausted all its resources when I arrived. It relied on OCH to survive. It was in business rescue and was in financial distress," he said.

Assistance

He said upon his investigations into the company's books, he decided to approach the power utility for assistance. He then engaged with Eskom regarding interim sustainable solutions that would help rescue the company.

At the time, OCM was supplying Arnot power station with coal.

"We made numerous attempts to meet with Eskom and we finally met. Eskom didn't want to reciprocate with us as business rescuers," he said.

Marsden added that later, the supply of coal to Arnot power station was halted.

He said Eskom's position was steadfast and it wanted OCM to honour its contract until 2018.

"Eskom had no movement from the contract; it wanted the contract to continue running. We then put [forward] a proposal for an interim solution."

Suspend coal supply

Marsden said a decision was taken to suspend the supply of coal to Eskom, but a meeting was later called by former chief executive Brian Molefe. The meeting was held at Eskom's Megawatt Park building on September 3, 2015.

Upon arrival at the offices, Marsden said he was left outside the meeting. Only former Glencore chief executive Clinton Ephron and Eskom executives were allowed in.

Marsden said he and his colleague were later briefed about the outcome of that meeting by Ephron in the power utility's parking lot, where it was revealed that Eskom had defaulted on two months of payments and that an interim agreement had been reached that OCM should continue supplying Hendrina power station with coal.

He said the conditions at OCM were dire and there were fewer and fewer options available. He said he advised Eskom that these options included either selling the company to Eskom or to a third party. 

Marsden is continuing with his testimony. 

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