It is reported that Eskom has paid the Tegeta Resources, which is owned by the Gupta family, an upfront amount to supply coal to the Arnot power station.
Speaking to CapeTalk's John Maytham, Carol Paton of the Business Day says Eskom is paying Tegeta at a price higher than the export parity price.
Paton says the issue of paying suppliers upfront is quite unusual. Eskom had said that it's a common practice to pay upfront.
They gave two examples of when they did it before. It was when we were in crisis in 2008 and there was a mad scramble to get hold of coal and they paid upfront to suppliers. It is not a normal thing to pay upfront— Carol Paton of the Business Day
When asked if this were evidence of state capture, Paton said "there are several people on the board who are associated with the Gupta family and their companies".
She says what Eskom is paying Tegeta is an excessively high price. Eskom pays Tegeta R571/tonne.
What we also know is that they were suppose to award a permanent contract for this coal supply and didn't do that but kept on extending this temporary contract— Carol Paton of the Business Day
The Gupta company Optimum Tegeta, cannot bid for the permanent contract because the permanent contract was advertised in August and this company did not exist then. The Gupts never tendered— Carol Paton of the Business Day
It all seem to add up to very favourable deal for some people— Carol Paton of the Business Day
Listen to the full conversation below:
Also listen to Nazeem Howa talking about allegations of Gupta family being investigated for illegally channeling money out of the country and the Eskom deal.