Eskom demands PwC repay millions over ‘invalid’ contract

Eskom has demanded that consultancy PwC repay it R95-million, alleging the money was disbursed under an invalid contract. PwC has denied the allegation.

PwC’s 2017 contract to cut costs at Eskom was “illegal, unconstitutional, and thus null and void”, Sikonathi Mantshantsha, the utility’s spokesman, said in a reply to questions. It sent a letter of demand in April for the fees to be returned.

An investigation Eskom commissioned from G9 Consulting and Advisory Services found PwC took credit for work the utility had done itself, according to amaBhungane, which first reported the development. The probe also found the payment structure was unlawful, it said.

PwC said it won the Eskom contract after a competitive bidding process, and that on average 27 of its staff worked full time for a year on the project, which identified potential savings of R56-billion for the utility. The quantum of fees referred to by Eskom in its letter of demand was for the entire project team, which included three other professional services firms, it said.

“PwC’s own investigations to date have not identified any basis on which to entertain Eskom’s demand,” the consultancy said in a statement. While PwC co-operated with the forensic investigation that Eskom’s letter was based on, it hasn’t seen the underlying report and therefore is unable to comment further, it said.

Eskom has also sought to recover funds from other international companies that it accuses of failing to deliver value for money or flouting state procurement rules during former President Jacob Zuma’s nine-year presidency. Deloitte and McKinsey & Co are among those who’ve agreed to settle.  — Reported by Paul Burkhardt, (c) 2020 Bloomberg LP