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SIU waiting for responding papers in application to nullify Eskom, Tegeta deal

Jan 13 2019 10:21
Khulekani Magubane, Fin24

The Special Investigating Unit was waiting for responding papers to be filed in its court application to have a coal supply contract between Eskom and Gupta-linked mining company Tegeta declared illegal and invalid soon.

The SIU, an investigative body that conducts investigations at the request of the president, is looking to have the the contract worth R3.7bn set aside.

The unit says the contract between Tegeta and the power utility was concluded for the period 2015 - 2025, meaning that, unless it is set aside, it will endure for seven more years. 

According to City Press, the SIU approached the North Gauteng High Court in Pretoria regarding the contracts in December.

SIU spokesperson Nazreen Pandor told Fin24 in December that along with the court application, the unit was investigating the controversial contract for any potential criminal activity.

"The application currently before the High Court addresses the legality of the contract concluded between Eskom and Tegeta, in particular whether the process followed in conclusion of the contract was compliant with the Constitution and the Public Finance Management Act," said Pandor.

Pandor said any evidence found by the SIU that points towards a criminal element in the contracts will be referred to the National Prosecuting Authority. 

"During the second phase of the SIU’s investigation we will determine whether Tegeta delivered the required quantity and quality of coal for which it received payment from Eskom. Losses suffered by Eskom, if any, will be calculated and recovered by the SIU by way of civil litigation," Pandor said.

She said the appropriateness of criminal prosecution will be determined by the NPA.

She said responding papers had not been filed and were only expected in the New Year. 

Eskom spokesperson Khulu Phasiwe could not be reached to comment on Wednesday about whether Eskom would file a response and when such a response would be filed.

Tegeta Resources and Energy is the Gupta-linked company that clinched the Eskom coal supply deal and inherited Optimum coal mine from Glencore, amid allegations that Tegeta strong-armed Glencore into letting go of the colliery.

However the company under-supplied to Eskom in subsequent years, according to Eskom's current leadership.

A leaked National Treasury report in 2016 said that Tegeta received preferential treatment when vying for the lucrative Eskom deal. 

The company went into business rescue last year, following the fallout that came with the Bank of Baroda leaving the country.

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