Molefe Exposes the “Dirty Reality” behind the Apartheid Era Contracts at ESKOM

The domination by the White companies in South Africa is not hidden from anyone. It’s a fact that since decades now, all the WMC supported allies are using their influence in some way or another to exploit the country’s resources for their own benefits and purpose. The recent addition to their corrupt deeds has been a revelation by former ESKOM Chairperson Brian Molefe in an exclusive interview given to the New Age Newspaper. In the interview, Brian Molefe has literally blown the whistle about the Corrupt deeds by the WMC allies while he was on chair at ESKOM. In an exclusive interview given to the New Age Newspaper, Molafe has accused Parliament of initiating the “State Capture” probe to defame him and he has also confirmed that he is ready to be investigated to get his name cleared from the same. Following are the excerpts from his Interview:


Have you been given a fair hearing?

I feel a deep sense of injustice. The allegations against me were not findings. They were just observations by the public protector (former public protector Thuli Madonsela). But when they were made she never contacted me to ask me questions. So a fundamental tenet of the legal system, the right to be heard, she denied to me. She went ahead and made insinuations.

The South African Council of Churches also had a report it wrote but it too did not bother to ask me for my side of the story. Was it not the correct thing for people of the cloth to say,“Mr Molefe, we need to see you”?

And then the academics at the Graduate School of Business at UCT, under Prof Anton Eberhard, made their contribution. Eberhard was the first guy called to give evidence in Parliament and he wrote a book, a guide for parliamentarians on the state of capture. But even those academics did not come to me. I’m not aware they went to Mr (Anoj) Singh, Mr (Matshela) Koko or anyone else.

They presumed guilt from the start. Now, this is not in the spirit of the Constitution. Parliament and its inquiry have called witnesses and these are the people who are ostensibly coming up with evidence. They have called them and said they’d call us but they have not indicated when.

I’ve made hundreds of calls to Parliament to ask them when I would be called. I’m told I’m entitled to legal representation. I watch it every day on TV. My name has been dragged through the mud, without any prospect of a hearing.

Now what concerns me is that Parliament will close for recess in the first week of December. I don’t know if the inquiry will go on but the perceptions being painted by these people will be the predominant perceptions in society from the time the inquiry starts to when it ends. By the time they call me, it might not even matter.

This, I think, is unjust. My right to be heard is being trampled on by institutions of our democracy, by the former public protector. The way she did that report, her investigations were not complete. She then proceeded, after making those allegations, to instruct the president to establish a commission of inquiry.

Most of the people in Parliament were not there when the Tegeta deal transpired. A lot of people who are now experts on the Glencore deal do not have first-hand knowledge of what transpired.

Did the public protector ever ask you about your relationship with the Guptas?

No, she did not interview me. I was asked once in Parliament in another hearing and I said I know the Guptas. But to ask why we did a deal that involved the Guptas somehow meant that if you were a black person, you had to give reasons. To be excluded from doing business with the Guptas, they have to be blacklisted and they are not.

What are your views about Parliament’s inquiry into state capture and state-owned enterprises?

I have spoken to respected jurists in South Africa and the legal advice has always been that I have to wait for an appropriate forum to be heard. So the appropriate forum is the commission of inquiry where these matters can come out into the open.

Your pension is under scrutiny. Where is this matter now?

I joined Eskom in September 2015. On October 1 I was made permanent, it was an open ended contract. I was to work at Eskom until I retired. A month into the contract, the minister (Minister of Public Enterprises Lynne Brown) said we had to change the contract. So I said to them: “Guys, if you change my contract into a five-year contract, it will impact on my pension.” I had worked at the PIC (Public Investment Corporation) for seven years and I had worked at Transnet for four years. My problem was that when I jumped like this, I was not accumulating a pension of substance. To accumulate a substantial pension, you have to be in one place for a long time.

They (former Eskom chairperson Ben Ngobeni and the Eskom board) wrote to the minister and what was recommended was that when I left, I would be treated as a long-term staff member. When the public protector’s report came out, I said: “Guys, this is difficult. Can I take early retirement?” I applied and they could have said no, but they didn’t. They approved my early retirement.

I became a pensioner in January 2016. They gave me a pension every month. When I was a pensioner, the ANC said: “We need skills in Parliament. Would you consider going?” I agreed. I have been a member of the ANC all my life.

I joined an ANC branch in Hartbeespoort where I have a property. But when I was in Parliament, an article stated I was paid R60m, which was not true. I was receiving a monthly pension. The actuaries calculated the actual value of the pension.

While in Parliament, I received a call from Eskom, saying they had made a mistake and should have never allowed my early retirement. I applied for early retirement and it was approved. I don’t see anything wrong with what I did. If the early retirement was not appropriate, they should have said so. Eskom stopped the pension and then asked me if I would consider going back to Eskom in exchange for cancelling the pension. I said I would. The minister knew about it. Ten days after going back, the minister said they were rescinding the decision to take me back so that threw me into the streets. The matter is now in the hands of the court.

Can you give us the background to Eskom’s evergreen contracts with major mining houses, including Glencore?

If you received a mining licence, Eskom would build a power station close to the mine. They would give you money to establish the mine, pay for equipment and give you a 40-year contract to supply coal. This is what is called cost plus mine. The prepayment has been there for years on the cost plus mines.

The benefit to Eskom for giving capital is that you will supply coal to Eskom. The Glencore contract was a cost plus mine. That 40-year contract was coming to an end in 2018. The price that was agreed to at the time was determined up front.

So I arrived at Eskom in 2015 and they told me that these guys were supplying us with coal at R150 a ton but they want to increase the price from now until 2018 to R530. I said no, we didn’t have the money, we were in the middle of load shedding and we were not getting any tariff increases. Glencore had a contract to supply us with coal until 2018 at R150. I’m not ashamed that I refused. I would do it again. Imagine if that agreement had been concluded and I signed it, people would say that Glencore must have bribed me.

We read the contract properly and in terms of the contract, over the 40 years they were supposed to supply a certain quality. And the reason why the quality of coal was specified is because if the power stations get a lower quality of coal, they can break down.

If they supplied lower quality coal, they were supposed to get a penalty. Over the 40 years, that clause was not enforced so I said calculate the instances where that penalty should have been enforced and the cumulative value of the penalty now. That penalty was R2.1bn.

I said to Glencore that they would supply coal at R150 and pay that penalty. They said they couldn’t and if they did that, the mine would close down.

I said to Mr (Ivan) Glasenberg: “You expect me to collect arrears from Soweto but I can’t collect from you. I want it. That penalty must be paid.” He said to me in June 2015 that they would stop the supply of coal to Hendrina and there would be more load shedding. I said bring it on. Of course, the moment that threat was put on the table, I went back to Eskom and said we must increase the stock price in case they follow through with their threat. We scavenged for coal.

Former mineral resources minister Ngoako Ramatlhodi claimed you put him under pressure to suspend Glencore’s mining licence. Is this true?

In July, there was suddenly an issue with the Minister of Mineral Resources. The Department of Mineral Resources said Glencore was going to retrench people, so the department would take away their licence and they did. If they didn’t have a licence to mine, they had to stop supply.

I went with Mr Ben Ngubane (chairperson of Eskom) to Ramatlhodi and asked them not to take away their licence. They want to stop supply. Today, Ramatlhodi said I went to him to ask him to close the mine. The Department of Mineral Resources took away Glencore’s licence in July 2015. Within a few days, they gave back the licence.

If Glencore unilaterally terminated the supply of coal to Hendrina, the implications of not delivering would be load shedding and they knew that. We would interdict them to enforce the R150 per ton fee. They had to find a way of terminating supply in a way that wouldn’t involve going to court. After getting back their licence, the next thing they did was to put the mine into business rescue.

In terms of business rescue laws, business rescue practitioners can suspend any contract. Their mission is to rescue the business. The first thing the business rescue practitioners did in August 2015 was to write to us, saying we would have to increase the price to R450 or it would not be possible to rescue the business. The only thing we could say to him in terms of the business rescue laws was to ask for the rescue plan. We did not receive a plan. Their only plan was increasing the price of selling coal to Eskom.

Glencore suspended the supply of coal but the power station did not close down. We continued to generate electricity even though they stopped supplying coal at the beginning of August 2016 with the hope that it would increase load shedding. We successfully stopped load shedding on August 8, 2016. For the first time, we went through a whole month with no load shedding and without Glencore’s coal because we had made contingency plans. We survived and we have not load shed since.

A month later, the CEO (Glasenberg) called and said they wanted to talk. They asked if they could start supply again. I said: “Fine but you must start supply tonight.” Half an hour later, he called again and said: “I’m sorry, Mr Molefe, but can we start supply from tomorrow morning at 8am?” I said that was fine.

Do you know the sense of victory we had at the time? It meant that this issue of R530, or R450 per ton of coal, was gone. We called their bluff but we came out on top. And, most importantly, we were not load shedding. Then Glencore came and said they would supply Eskom at R150 a ton but they wanted to sell the mine. I said: “You must tell whoever you are selling to that there is a contract with Eskom until 2018.” A lot of people wanted to buy it, including Shanduka, but they wanted to revise the coal price. I said no, it stays until 2018. Eventually they came and said, “We have a buyer. It’s the Guptas and they don’t have a problem with R150. They will buy the mine.” The next thing Thuli Madonsela said I made phone calls to the Guptas about the sale of the mine.

Parliament has never been interested in finding out what caused load shedding in the first instance and how it was overcome. So that’s the story. There were also other mines that had 40-year contracts like Exxaro and Anglo American.”