South Africa’s power utility Eskom has truncated six coal transportation agreements following an investigation that is part of efforts to ensure clean governance.
Eskom terminated its agreements with Constructibility 10CC, Fastrak, IM Monokoane, NJM Transport, Lamavuso and Dhlams & Dhlams.
Following a tip-off in July 2016, Eskom undertook an investigation into allegations that some FCA transporters had unlawfully introduced additional trucks into the coal road transportation system.
Eskom currently moves about 40Mt of coal using two road transportation channels, one of which is the Free Carrier Arrangement (FCA), which involves transporters that are directly contracted to Eskom. There are currently 58 of these transporters running under a four-year contract that commenced in April 2014, ending in March 2018.
As a result of this investigation, six FCA transporters were suspended between 14 July and 7 September 2016 for seven weeks.
“Considering the discrepancies that surfaced during this investigation, Eskom commissioned an independent investigation into the unlawful introduction of additional trucks by FCA transporters,” Interim Group Chief Executive Matshela Koko said on Monday.
Koko said it has since emerged during the course of the secondary investigation that the conduct of the six transporters has severely prejudiced compliant FCA transporters.
“This conduct has gravely deprived compliant transporters fair and equitable distribution of coal that was available to be hauled to Eskom’s power stations,” Koko said.
Meanwhile, the rest of the road deliveries are done by the mines through a model that is normally referred to as Delivered “DEL” within Eskom. In this instance, transporters are directly contracted to the mines for the delivery of coal, as opposed to the ones directly contracted to Eskom.
Koko emphasised that Eskom will continue to take decisive action to ensure compliance with the policies of the utility so as to achieve “unimpeachable procurement decisions across the company’s entire value chain”.
The termination of the agreements is with effect from 3 February 2017