Eskom paid R1.6bn to ‘clueless’ consultants to assist it climate its monetary storm

Consultants from Regiments Capital and McKinsey knew nothing about a lot of the work that Eskom paid R1.6bn for and needed to be schooled on elementary ideas by the facility utility workers.

This was the testimony given by Mosilo Mothepu, a former Trillian Capital and Regiments Capital worker, earlier than the Zondo fee into state seize on Thursday. Mothepu led the crew of consultants that had been assigned to assist Eskom climate its monetary storm in 2016.

Mothepu instructed the fee she had left Regiments Capital for greener pastures however was approached by the corporate’s then CEO Eric Wooden in 2015 to return due to a profitable contract that was on the playing cards. A tempting provide of a greater pay and bonus lured her again.

Regiments Capital was a monetary service firm offering consultancy companies in property, fund administration, advisory and securities.

When she returned to the Regiments Capital the corporate had elevated its workforce from 50 to 250.

Mothepu stated McKinsey, one other consultancy agency, was the primary contractor and Regiments Capital was a subcontractor and their shared charges and advantages between them.

She stated her crew began having conferences with former Eskom CFO Anoj Singh in July 2015 earlier than he formally began his work on the energy utility.

Tagged “Challenge Panjora”, the consultants needed to provide you with options for value financial savings initiatives on procurement, era, establishing the engineers prime programme and initiatives that might optimise the corporate’s stability sheet. In addition they needed to cope with insurance coverage points on boilers, one thing none of them had an concept about.

Eskom supplied the consultants with a crew of junior technocrats who had been equally clueless.

 “Eskom was able to all of those initiatives on their very own… I instructed Eric that I don’t know something a few boiler and insurance coverage however we had been shoved down the throat of the Eskom officers. In fact there was quite a lot of resistance. In my statement, a part of state seize is simply appointing consultancies unnecessarily and siphoning off very giant charges. Whereas the inner crew has the capability to carry out them,” Mothepu instructed the fee.

“Eskom had an insurance coverage division. It was headed by any individual who was an knowledgeable on insurance coverage. My crew and I knew nothing about insurance coverage…We got here in as Regiments and McKinsey and finally Trillian [Capital] in the course of the implementation of those transactions… A complete of R1.6bn was paid, which was fully pointless as a result of Eskom had and nonetheless have the capability,” Mothepu stated.

She added that the one experience that the consultants had was negotiating quick and long-term mortgage services.

“Our heads had been underneath the water… We had been asking very elementary questions as a result of we had been fully clueless,” she stated.

Mothepu instructed the fee that Singh introduced the consultants forward of his official announcement.

“He needed these low-hanging fruits in order that when he was lastly appointed he shines within the first 100 days and say that is what I’ve completed in a brief time period.”

Mothepu stated the consulting firms had been working whereas Singh was nonetheless anticipated to take the precise contract to the Eskom board and Nationwide Treasury for approval. Work, nevertheless, started earlier than these approvals, she stated.

She stated among the consultants got entry playing cards to Eskom workplaces and a boardroom was availed for them to make use of.