South Africa

Treasury vs Eskom: A government at war with itself

By Stephen Grootes 29 August 2016

South Africans were treated to an extraordinary sight on Monday night: the sight of a government at war with itself. The sight of the National Treasury telling the nation that Eskom was lying. At the same time, Eskom was accusing the National Treasury of “gaming”, of playing games with regulations and laws, all to protect itself. If ever you wanted proof that the instability in the ANC was going to have an impact on government, on governance, on our everyday lives, this was it. By STEPHEN GROOTES.

If you’re looking for how factionalism, groupings in the ANC that fight each other, have the capacity to destroy what we have built up, here it is. A public fight, in the media, between Eskom and the Treasury, over a company called Tegeta Exploration and Resources. We’d tell you who owns it, but you’ve already figured that out. (*Cough* Guptas! *Cough*)

It started as a more-than-Cold-War of statements. On Sunday, Eskom released a statement responding to claims in the Sunday Times that the Treasury had already completed a report it was compiling about contracts signed with Tegeta. This all relates to a review the Treasury is doing of the contracts signed with Tegeta. The paper claimed that Eskom had paid around R130-million for coal that it didn’t actually use. Eskom took issue with this. In a statement it said that “contrary to the allegations made by the Sunday Times today, the National Treasury has not issued any conclusive findings against Eskom on any of these contracts”.

So far, this was your bog standard traditional Sunday afternoon denial of a story in a Sunday newspaper.

But the statement also said this: “Eskom continues to co-operate with the National Treasury on its investigations of the coal contracts.”

It is this statement that led the Treasury to respond on Monday afternoon. And it is not happy. It “noted with concern” Eskom’s claim that it had been co-operating. Then, the punchline:

“The National Treasury would like to categorically state that its efforts have met resistance.”

In other words, the Treasury says, on a letterhead nogal, that Eskom is lying.

It went further, explaining exactly how they had tried to get this information; it sent a report to Eskom CEO Brian Molefe himself, it granted Eskom an extension, it asked Eskom for a “system generated list of payments made to Tegeta” (presumably “system generated” means “untouched by manipulative human hands”), and that Treasury Director-General Lungisa Fuzile had requested that Eskom withdraw its statement suggesting that “all the Tegeta coal contracts with Eskom have been extensively audited by various agencies, including the National Treasury, whilst clearly this is not the case”.

Then came another shove:

“To date, not only has Eskom failed to honour its undertaking to submit comments to Treasury’s report but has chosen to ignore correspondence and put up all forms of hindrances.”

This, ladies and gentlemen, is what a government at war with itself looks like. Public, vicious, personal.

But that was just the start. The war of words on paper via e-mail then got even more personal. Eskom’s Group Executive for Generation, Matshela Koko went onto 702, and told Xolani Gwala that they had been co-operating with the Treasury. When pushed why the Treasury would have made these comments in public, he went on the offensive:

“This is gaming here. We are seeing gaming here, and we are very disappointed that there is gaming here. We have been co-operating all along and now they change their tune.”

But the real comment, the point that went all the way back to the Hawks’ treatment of Pravin Gordhan, was this:

“The gaming here is the perception and the narrative out here is that everybody that does business with Tegeta is corrupt, and the National Treasury is here to save South Africa.”

Surely, what Koko is saying is that Gordhan is doing this simply to save his own skin, that it is a tactic, a bid to get support from the public, a manoeuvre to suggest that this is why he is being targeted.

(Listen: Matshela Koko’s interview on 702)

While Koko was on 702, a few minutes later, in a studio just up the William Nicol in Hyde Park, Kenneth Brown, the Treasury’s chief procurement officer, was speaking to ENCA. In that interview, Brown said this:

“Let me put it blatantly. Eskom is lying.”

(Watch: ENCA’s interview with Kenneth Brown)

How is this not a government at war with itself?

There is a lot to look at here. Putting aside the interesting fact that these fights are now often fought on independent broadcast media (and not Hlaudi FM), it is important to look at the back stories of those involved. Koko had the misfortune to be interviewed recently by M-Net’s Carte Blanche. Anyone who goes in front of those cameras had better be prepared. Especially if they are talking about coal contracts, linked to Tegeta and the Guptas. Koko was not. And the result was excruciatingly painful.

Then there is Brian Molefe, the CEO of Eskom. He has gone on the record several times suggesting that the Gupta family are good business people and that he is happy to do business with them. He is one of those people who appear to have been to their home(s) in Saxonwold. When people ask who would be put in the job of Finance Minister should Pravin Gordhan be kicked out, his name is often mentioned. His presumed competence and willingness to work with the Guptas is seen to be the winning combination. This could suggest that in a way this is a fight between the Finance Minister and the Wannabe.

Then we have the chair of Eskom, Ben Ngubane. He can surely not claim ignorance of this affair. Ngubane is one of those people who goes from chair of contested institution to chair of another contested institution. He used to be chair of the SABC, back in the glory days when it only blacklisted commentators rather than whole communities. For much of his career, it has appeared as if he is there simply to do Number One’s bidding. His behaviour at Eskom does not allay that suspicion.

And of course, on the other side, sit Gordhan, Brown, and the rest of the Treasury. No matter what you may think of them, no one has ever found any evidence of corruption against them, no one has made any allegation of corruption. And the only people who think that Gordhan should go before the Hawks are Kebby Maphatsoe (on the Gupta cheque book, who admitted last week to lying in the Ronnie Kasrils defamation case), Des van Rooyen (another Finance Minister Wannabe), and those aligned to Zuma.

Just as a brief aside, consider this; would anyone be supporting Gordhan now, if the head of the Hawks, the person demanding he make a warning statement, was Vusi Pikoli? Probably not. It is the very fact that Mthandazo Ntlemeza, a man a judge found to be a liar, is leading the witchhunt that makes it so obviously a political move.

Then, never mind the personalities at play, but in a dispute like this between Eskom and the Treasury, the solution is obvious. There must be a chain of evidence, a chain of communication. E-mails are dated, documents in big organisations are date-stamped when they arrive. To determine who is lying is not going to be that difficult. So then, how can both sides be quite so cocksure? If we look at the history of these matters, again you would have to say it is unlikely that Gordhan would go this far without being absolutely certain of the facts. It would be a break with all of our previous experience of the man.

Usually, within a government, when a dispute breaks out between two different groups or departments, the person in charge of it all bangs some heads together and makes a final decision. That decision must have legitimacy, otherwise it will not be implemented properly. The person must be trusted, everyone must know that they will do the right thing. And if they have authority, this kind of dispute simply doesn’t happen in the first place.

Now, who occupies that position right now…. DM

Photo: Finance Minister Pravin Gordhan (Greg Nicolson), Eskom CEO Brian Molefe (eNCA frame grab)



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