Eskom begins process to recoup money
After months of public outrage, Eskom has taken steps to recover billions of its funds irregularly paid out to consulting firm McKinsey and its politically connected ally Trillian. The power utility said on Thursday it had written to the management consultancies to “request their co-operation in repaying the funds”.
After months of public outrage, Eskom has taken steps to recover billions of its monies irregularly paid out to consulting firm McKinsey and its politically connected ally Trillian.
The power utility said on Thursday it had written to the management consultancies to “request their co-operation in repaying the funds”.
The funds appeared to have been unlawfully paid to the politically connected companies, said Eskom.
Eskom paid R1.6bn to McKinsey and to the Gupta family linked Trillian in 2016 for what it said was their help to save money under the top engineers programme, a plan to develop internal engineering consulting capacity. The utility did not follow its own procurement regulations in choosing the consultancies, including obtaining an exemption from Treasury for tendering procedures.
Controversially, Eskom agreed to pay McKinsey a percentage of the monies saved, instead of the prescribed hourly rate as per Treasury regulations. The McKinsey bill came to R945m for six months of work in 2016.
Eskom also paid R564m to Trillian, at the time majorityowned by Gupta associate Salim Essa, despite there being no contract for the local firm to provide any services to Eskom.
The demand to pay back the money also came months after Eskom first lied to Parliament and the public that it had paid Trillian “not a cent”. It was in June forced to backtrack and acknowledge it had paid hundreds of millions while it was not aware what services Eskom had received in return.
Sources told Business Day that letters of demand for the return of the cash were served on McKinsey and Trillian on Wednesday.
This week, Eskom suspended at least five senior managers who played a role in the saga.