Eskom presses on in pursuing McKinsey to pay back fees

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ESKOM is stepping up its push to recover at least R1.3bn from global consultancy McKinsey as well,Picture: Supplied

ESKOM is stepping up its push to recover at least R1.3bn from global consultancy McKinsey as well as from the Gupta-linked company, Trillian, in its latest move in resorting to the courts over the matter.

The embattled power utility has made a court application to recover the money, spokesperson Khulu Phasiwe said. Eskom initiated legal action more than two weeks ago to recover about R1.6bn which was reportedly paid to the companies as the contracts were later deemed unlawful. At the time, Trillian was linked to the Gupta family and had allegedly done little or no work for Eskom, but increasingly appeared unwilling to pay back the money.

McKinsey, on the other hand, said it was willing to repay the money. Phasiwe said McKinsey indicated to Eskom that it was willing and ready to make the payments to the power utility.

This would suggest a confirmation to return the money – said to be R1bn – to Eskom that was reportedly unlawfully paid to the consultancy. “Now they are just waiting for a court order before making payment,” Phasiwe said. The reality is that Eskom is going all out to recover the funds which were paid out for consultancy work after they were found to be irregular.

“Eskom’s new leadership has now applied to the court to have the fee we earned on the turnaround programme returned to them,” a spokesperson for McKinsey said in response to Eskom’s push to recover the R1.3bn.

“We welcome Eskom’s action. We have, since October last year, been seeking a transparent legal process through which to return the fee. “With Eskom joining the legal proceedings, we are a step closer. We hope that together with the Asset Forfeiture Unit and Eskom, we can work to resolve the legal process necessary to reach a speedy conclusion to this matter,” the McKinsey spokesperson said.

Meanwhile, industry sources said it was “mission impossible” for Eskom to tackle its liquidity problem.

Sources said that for the financial year ending March 31,2019 Eskom faced a dire financial crisis of negative free cash flow, R55bn in capital expenditure, refinancing R20bn on bridging financing due at the end of August, R20bn in debt maturities and at least a R34bn loss in power purchases.

Phasiwe said these were merely speculative claims, which he insisted should not be entertained. “Eskom is working on a turnaround strategy and how to take the business forward. “Those busy with speculation, we can’t entertain their agenda and misleading action,” he said.

-BERNARD SATHEKGE|bernards@thenewage.co.za

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