Eskom has ended its contractual relationship with Just Coal, a majority supplier of coal to the power station, due its consistent supply of inferior coal.
After numerous site visits to the contracted collieries, it was determined that coal supplied to the Tutuka power station by Just Coal was not extracted from the contracted collieries.
“This is in breach of its contractual obligations to Eskom. The result is that Eskom is burning an unknown combustion characteristic coal resource at its Tutuka power station, potentially resulting in load losses,” states Matshela Koko, interim group CEO.
[quote]Koko adds that in an effort to resolve the issue, the utility has requested technical information such as mine layouts and in-situ coal qualities from Just Coal. “The information provided did not adequately address it’s concerns,” he explains.
“On 16 March 2017, we had placed Just Coal in breach of its contractual obligations and requested additional technical information. We then afforded them until 23 March 2017 to provide the technical information and remedy the breach and they failed to do so.”
“We are intolerant of any deviations from the prescribed standards and processes. This, quite plainly, amounts to corruption, which we cannot condone in any part our business. As a state entity, there is an innate expectation to be prudent and corruption-free in how we conduct our business,” concludes Koko.
In February Eskom terminated six coal transportation agreements.
It currently moves about 40 Mt of coal using two road transportation channels, including FCA (Free Carrier Arrangement/Agreement), which involves transporters that are directly contracted to Eskom.
Feature image credit: Eskom