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Andre Pillay: Anoj Singh opened the door for McKinsey & Trillian at Eskom

Eskom treasurer Andre Pillay has told the commission that as Eskom was preparing to draft its corporate plan, Anoj Singh sought help from the two firms.

A screengrab of Eskom treasurer Andre Pillay testifying at the commission of inquiry into state capture in Parktown, Johannesburg.

JOHANNESBURG - Eskom treasurer Andre Pillay has told the state capture commission that former Chief Financial Officer (CFO) Anoj Singh brought in consultancy firms McKinsey and Trillian Capital to draft the power utility’s corporate plan, even though that responsibility fell under Treasury.

Pillay has taken the stand at the commission on Friday and says all this happened under the leadership of Singh.

A Treasury report into Eskom released late in 2018, found that the power utility entered into illegal agreements with McKinsey and Gupta-linked Trillian Capital, paying the companies over R1 billion without a contract approved by Treasury.

Pillay has told the commission that as Eskom was preparing to draft its corporate plan, Singh sought help from the two firms.

The commission’s Advocate Thandi Norman asked why the companies were hired.

“Why was it necessary for them [McKinsey and Trillian Capital] to assist Eskom in drafting its corporate plan?”

Pillay responded: “They were brought in as consultants and, from my own experience at the organisation, there was an impression created that we’re not capable of doing this [drafting corporate plan]. So, they brought outside help.”

Pillay says the drafting of the plan was a responsibility of Treasury and not consultants.

He says when he asked Singh why he was getting McKinsey and Trillian to do the work of Treasury, he simply responded that he was busy with other things.

ESKOM’S ‘SECRET DEAL’ WITH THE CHINESE COMPANY

Pillay has told the state capture commission that in 2017 Eskom’s executives signed off on a multi-billion-rand loan from the Chinese asset management company Huarong Energy Africa, even though it was clear the loan would not help but burden the power utility.

Last week, the power utility’s board chairperson Jabu Mabuza told the inquiry that Eskom would not be paying back the R25 billion loan to Huarong.

In 2017, Eskom received the loan from the company to build or refurbish power stations, a deal which led to the power utility incurring a R400 million so-called signature fee.

Pillay says when he got a call from Huarong in 2015, Eskom was cash-strapped with its debt at over R300 billion.

The power utility was trying to raise money to ease its liquidity, so it started negotiations with the company.

Pillay says the terms of the agreement were not good for Eskom.

“’The cancellation fee of a 0.2% of the amount of the programmed value shall be payable by Eskom if its repudiate, exterminates or cancel the term sheets, I made that abundantly clear in my meeting that this will not provide a solution.”

But Singh and then acting CEO Sean Maritz eventually signed what was called a secret deal with the Chinese company, which obliged Eskom to pay a R400 million signature fee.

Maritz was then implicated in a kickback scandal and was suspended by Eskom for withholding information that he authorised the signature fee.

WATCH: Commission of inquiry into state capture

(Edited by Zamangwane Shange)

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