Eskom and Tegeta taken to court over coal contract

Date: Dec 17, 2018

The Special Investigating Unit (SIU) has taken Gupta-owned mining company Tegeta and Eskom to court over a controversial R3.7-billion coal supply contract, the City Press reported.

The SIU has reportedly asked the Pretoria High Court to declare the deal unlawful and invalid, and is pushing for the two companies to pay punitive costs for their involvement.

“Given the disgraceful conduct evidenced in this application, and the pervasive corruption, abuse, lack of candour and nondisclosure, the scale of the costs order should be punitive,” the SIU said in its court filing.

The investigation into the coal contract between Eskom and Tegeta was based on former public protector Thuli Madonsela’s state of capture report and Treasury’s report on the two companies.

In its court filing, the SIU states that Eskom exploited a coal procurement mandate to award coal supply agreements to Tegeta between 2013 and 2015, allowing the Gupta-owned company to dictate the terms of the deal.

After the appointment of the Gupta-aligned board at Eskom, the power utility reportedly awarded a coal supply contract to Tegeta for low-quality coal to be provided at inflated prices.

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