Eskom CEO Brian Molefe has strongly rejected allegations that he undermined and blocked a review by National Treasury into the utility's coal contracts with Gupta-linked company Tegeta Exploration and Resources. 

“I am captured by the Constitution, not by the Guptas,” said Molefe, fielding questions from MPs about the alleged breakdown between National Treasury, Eskom and the Public Enterprises Ministry.

Molefe was backed by Eskom chairperson Ben Ngubane, who said he had full confidence in the CEO, adding that there had been a "campaign to kill the trust in Eskom".

The State-owned entity has been accused of ignoring National Treasury’s demand to hand over responses to its 172-page report that investigated the coal contracts, including the systems-generated list of payments made to Tegeta Resources.

“It sounds like the objection is just to doing business with Tegeta or the Guptas. We have to consider them like [we do] everyone else,” said Molefe, adding that not doing business with Tegeta would require Eskom to blacklist them in terms of the Public Finance Management Act and the Constitution.

“I get labelled a Gupta person because I won’t break the laws of this country. I won’t blacklist them without a reason.”

Molefe was responding to questions from MPs, including EFF MP Thembinkosi Rawula, who accused Molefe of “bending over backwards for the Guptas and giving them preferential treatment”.

“I do not know what the reasons are other than gossip and innuendo. This sounds like a kangaroo court,” said Molefe.

He added that Eskom had decided to wait until after its next board meeting in September before giving its responses to the National Treasury. This would ensure Eskom management would get board approval first.

He said he did not think it was a crisis and that the responses could wait until the September board meeting.

Nevertheless, Eskom sent responses to the National Treasury yesterday.

“There was no attempt on our part not to comply with the requirements from the National Treasury,” said Molefe adding that, despite the impasse, he held the Treasury in high regard, including Finance Minister Pravin Gordhan.

“He’s a man of immense integrity and I think he is the right person for the job he is doing.”

The Eskom CEO, who has been touted as the next Minister of Finance, also rejected allegations that Tegeta had delivered substandard coal.

“The issue of substandard coal had absolutely no basis. It was tested at SABS. Some of our employees had classified the coal to be substandard. We took this to the SABS and they said there was nothing wrong with the coal, and those employees were suspended.”

Ngubane, meanwhile, added that Eskom needed coal urgently or power stations would shut down and that Tegeta had said it could only open up a new coal seam if it received prepayments.

The Eskom chair said the system of prepayments was nothing new.

“We have had contracts in Eskom that have given huge prepayments to the Anglos and [other] companies mining coal for Eskom. They were given contracts by the National Party government. They have benefited on the sweat of our miners.”

He said Eskom did not want to renew the contracts of existing coal suppliers.

“Five of them are coming to an end. We don’t want to renew them. We want to help small miners and black women and we need cooperation from you,” he told the MPs.

Eskom CFO Anoj Singh further noted that Eskom had long-term prepayment contracts amounting to R38-billion with Exxaro, Anglo and big mining houses.

“They take the money and then invest in the mines, in assets and equipment to excavate and transport the coal. As late as November last year, Exxaro requested prepayment for sinking a new shaft.  It is common practice in this environment,” he reiterated.

Molefe also denied allegations that Tegeta had not organised a water licence before getting the contract.

“At the time the contract was signed, the water licence was in place, and we provided that information to the Treasury yesterday,” said Molefe.

Molefe said he’d noted an accusation from Treasury’s chief procurement officer Kenneth Brown, who had called him a liar.

“I’ve been called worse things. It comes with the job. I’m okay with it, but I know my conscience is clear and that I have not lied. We had the best intentions.”