DUDUZANE ZUMA

THERE was an invisible but direct line between two very  different reports in a leading newspaper yesterday.
The one was about President Jacob Zuma’s son, Duduzane, acquiring an ultra-luxury apartment at Dubai’s most prestigious address, the Burj Khalifa skyscraper, the tallest building in the world.
The other was about riot over a lack of housing and other appalling services suffered by residents of Breidbach. They were so desperate they set up burning barricades along the N2 and 70 public order policing officers had to be sent in to try to restore order.
How do these two stories tie up?
In a nutshell, Duduzane Zuma was able to buy his luxurious eye in Dubai’s skyline because he and his business partners, the Gupta brothers, specialise in massively bleeding off state resources through deals with state-owned enterprises.
Chief among these is Eskom which, 17 years ago was in the top five low cost energy generators in the world. Since then it has sunk to the bottom quartile in the world, with electricity costs escalating by over 500% in the last 10 years.
There are various reasons for the massive rise in electricity costs, says the Organisation for Undoing Tax Abuse, but key among them is the questionable coal supplier contracts Eskom has struck.
Enter the Gupta-Zuma owned companies.
Around two years ago a process began which resulted in the hijack of the Optimum coal mine from Glencore by the Gupta-Zuma’s Tegeta.
Brian Molefe was Eskom  CEO at the time.
Thereafter the price of coal  supplied from the same mine by Tegeta to Eskom rocketed – up from the R161 per ton paid to Glencore/Exarro to R550 per ton (R700 per ton with transport) paid to the Gupta-Zuma company.
This hyper-inflation of the coal price did not stop with one mine. Eskom uses over 90 million tons of coal per annum. Not all of it comes from Gupta-Zuma owned companies, but a lot does.
The academic study on state capture released last week notes “this massive expansion of contracts” was also evident for other Tegeta and Oakbay mines, including and particularly Koornfontein, during 2016.
The Office of the Chief Procurement Officer’s website sheds further light: in the second quarter of the year, a Tegeta contract with Eskom to supply the Majuba power station was increased from R3794748750 by an additional R2.9-billion. Another Tegeta contract to supply coal to the Arnot power station rose by R854955000, in addition to the original contract value of R235021150.
Koornfontein mine, owned by Tegeta, with a contract to provision the Komati power station, had its contract increased by a further R341544200.
In the third quarter of 2016, the Koornfontein mine saw the value of its contract increase by a further R6955200000, in addition to the original amount of R341544200 – a 2000% escalation.
This makes it clear, says the academic study, “Eskom has been paying massive rents for the same coal it had previously bought cheaply”.
Eskom has used taxpayer money  to pay these massively inflated prices to the Guptas and Duduzane Zuma. This tax money should rather have gone to provide services for people, in Breidbach for example.