Instead of questioning a transaction involving a single mine’s coal supply contract to Eskom, Parliament should probe all of the state entity’s coal contracts, writes WESLEY SEALE
Zwelinzima Vavi, it is said, often tells this story. A certain senior comrade in the movement was causing havoc in the women’s league. So much upheaval had he caused that the other leaders of the movement decided to call in the leader concerned and address him on the issue. They did, but his response to the concerns of the movement’s leadership was telling.
He said: “While the capitalists are raping this country on a daily basis and while the racists are exploiting our people left, right and centre; while our workers are being exploited on the factory floor and in the mines and while our children are subjected to Bantu education, you have the time and energy to call me in and talk about fish and chips?”
Nothing comes closer to this story than the summation of the presentation done by Eskom at the Portfolio Committee on Public Enterprises. While Eskom, our people, and the state are being exploited and decimated on a daily basis by white monopoly capital, the portfolio committee finds it wise to talk about the fish and chips which today is called the Guptas.
Let us take some perspective. According to Eskom’s presentation, South Africa’s largest state-owned enterprise with an asset portfolio of over R661 billion, is the largest purchaser of coal on the African continent. Eskom buys approximately 115 million tons of coal per annum.
In 2012, the price of coal per ton was an estimated R189. Today, that price is around R400. Therefore, Eskom spends on an annual basis, at the moment, about R50 billion on coal alone. The amount is so huge that it contributes just under a third of Eskom’s total cost and a large portion of the tariff that Eskom charges for electricity. Eskom’s expenditure on coal accounts for 0.66% of South Africa’s GDP.
Eskom admits that the majority of its coal supply contracts are often entered into without open tender process. In other words, it is open to huge manipulation. But who is doing the manipulation? Who are the people getting the contracts which are not being done through an open process? Associates of Public Enterprises Minister Lynne Brown? No. Friends of President Jacob Zuma? No. These people are the fish and chips the media want us to concentrate on.
It is a fact that 73% or more than two-thirds of these coal contracts go to non-black owned companies. Only 27% of coal suppliers to Eskom are Black. Of this27%, just under 7% comes from Tegeta, linked to the Guptas.
Therefore, the portfolio committee on public enterprises is concentrating on 7% of Eskom’s coal suppliers meanwhile being happy with the manipulation of Eskom tenders by the other 73% because one would assume, they are white-owned. Here is a blatant example of white monopoly capital.
Yet the manipulation does not stop there. These white-owned companies, often determine the price too that the taxpayer must pay in order to get the coal. For example, Glencore was aware of Eskom’s struggles and therefore shot up their price to R442 per ton. On this front, our public representatives were silent!
The presentation in the main focused on Eskom’s progress report on auditing firm PriceWaterhouseCoopers’ investigation and recommendations that Eskom had commissioned. In this report by PwC, recommendations focus on processes of coal contracting as well as the safeguarding of documentation. PwC had made a total of 48 recommendations to Eskom.
Of the 48 recommended, Eskom had already implemented 80%, or 39, of these. Six were partially implemented while three were to be implemented in the future. But again, it seems that even in this presentation, Eskom, through pressure from outside, was concentrating on the fish and chips, the small-fry, Tegeta, and not necessarily the major role players that have been manipulating and exploiting Eskom’s demand for coal.
One of the issues addressed was the price arrangement for the coal between Eskom and Tegeta. While Tegeta had initially quoted Eskom R17 per ton for the Brakfontein Colliery, Eskom was eventually able to get Tegeta to settle for R13 per ton. Eskom was also guaranteed that the coal provided by Tegeta would not be reject coal.
Eskom also went on to explain the much controversial prepayment to Tegeta of approximately R659 million. However, given the threat of load-shedding during the time, 2008, the priority for Eskom was the delivery of quality of coal on time. Eskom indicates that of all suppliers of coal only Tegeta and Umsimbithi were able to meet these two requirements; quality coal and on time. It was also not uncommon for Eskom to make upfront payments to other suppliers. In other words, Tegeta were not the only ones to receive payment in advance.
We are familiar with the cliché of concentrating on the black dot instead of the white wall. In this case, it is literally the black dot called Tegeta versus the white monopoly capital wall. Again, we have chosen to focus on the small crooks while the actions of the big crooks have been somewhat normalised. We live with the facts that companies such as Glencore can exploit the taxpayers and we simply write it off to capitalism. Ah well, we say, that’s what capitalism is. The businesspeople are only interested in profit.
Yet this is precisely why ordinary folk have representatives in parliament. Our representatives should be putting a halt on such exploitation of the people. How ironic that Cosatu, Vavi’s former organisation, chose to concentrate on the fish and chips when it came to dealing with him.
Day after day, we are confronted with the perception that small fries of fish and chips are what should be occupying our minds. The Financial Intelligence Centre listed large volumes of suspicious transaction, yet our focus is on the Gupta ones. Eskom has been exploited for years and continues to be exploited by mainly white companies and we are made to concentrate on the likes of Tegeta.
The time has come for South Africans to reject concentrating on the black dot and start dismantling the white wall. We can no longer be absorbed by stories of fish and chips while our people go hungry. We must resist the delusions that persist in our national narrative.
Wesley Seale Teaches Politics at Rhodes University. He is currently a PhD Candidate at Beijing University in China