New‘facts’, few clear truths on Eskom

Eskom has, for the first time, confirmed that it had paid the Gupta-linked advisory firm Trillian R495-million. Until Wednesday it had denied that it had done any business or made any payments to the company.

The reason Eskom had previously made that denial may have had something to do with the nature of the contract, or lack thereof, with Trillian, said recently installed board chairperson Zethembe Khoza.

“We do not have a contract with Trillian ourselves; it was a subcontract for [internal advisory firm] McKinsey, so if you were searching using the contract you could not pick up any payments,” Khoza said.

McKinsey quickly disputed this version of events, issuing a statement to say it had never subcontracted Trillian (despite a letter that said otherwise) and adding that Eskom knew as much.

McKinsey also disputed that it had been suspended from working for Eskom by Johnny Dladla, as the interim Eskom chief executive had claimed.

“We mutually agreed to suspend our work with Eskom,” McKinsey said.

There was similar confusion about a recent arbitration award in favour of Eskom against the Guptacontrolled Tegeta, which sells coal to Eskom. When Tegeta acquired Eskom supplier Optimum, former Eskom chief executive Brian Molefe insisted, vehemently and consistently, that Eskom would not forgive Optimum the R2.1-billion fine due for delivering substandard coal. Eskom’s refusal to compromise on this had apparently been a major factor leading to the sale.

On Wednesday Eskom said it had accepted a R577-million arbitration award, a reduction of 73% in the fine.

The company would not disclose details, but insiders have suggested Eskom started to reduce its claimed amount well before the arbitration process began and conceded ground in a fashion one described as “enthusiastic”.

Eskom had previously claimed it could not reveal the amount without Tegeta’s consent.

On Wednesday Khoza said Eskom had decided to reveal the number “in the interests of openness”, even though it was revealed by Business Day nearly a month earlier.

Eskom chief financial officer

Anoj Singh then explained that the reduction in the fine had been, in large part, because a change in coal sampling equipment in 2010 had caused “false positive” results. For reasons he did not explain this technical error was not discovered during several years of investigations and claims, but was identified after the Gupta family became responsible for the debt.