14 September 2017

South Africa: Scorpio & Amabhungane - How Mckinsey and Trillian Ripped R1.6bn From Eskom - and Planned to Take R7.8bn More

Photo: EskomSouthAfrica
(file photo).

It is now well-established that global consultants McKinsey and their local Gupta-linked counterpart Trillian extracted R1.6-billion in fees for "turnaround" advice given to Eskom. In this investigation, the first in a series, we delve into an explosive report that says Eskom ignored warnings that the proposed contract might be illegal, and reveal internal documents detailing how McKinsey and Trillian planned their multibillion-rand payday. The scandal has further dented Eskom's image, already battered by a succession of "state capture" revelations. Now it is threatening the consulting companies too. Corruption Watch says it is alerting US authorities about McKinsey, while Trillian appears to be fighting to stay open. By Susan Comrie for AMABHUNGANE and Pauli van Wyk for SCORPIO.

If you want to extract a hundred million or so from the state, dairy farms and coal contracts are the way to go.

But if you want to extract billions - as those involved in state capture do - then consulting contracts are highly effective.

After months of denials, Eskom finally admitted in July that it paid fees of R1.6-billion to consulting multinational McKinsey and Trillian Capital Partners, the local advisory firm until recently controlled by Gupta lieutenant Salim Essa.

That Eskom initially...

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