StateCaptureInquiry: Eskom flouted its own rules in R25bn Huarong deal, says Pillay
Johannesburg - Eskom treasurer Andre Frank Pillay on Friday told the Zondo Commission of Inquiry into state capture how Eskom flouted its own procedures when it signed a R25 billion unsolicited capital funding proposal with a Chinese consortium.
He said that Eskom's rules and procedures were flouted and that Eskom had pushed through with the deal even after realising that Huarong was not going to be able to deliver on its promises. Pillay said Eskom executive, led by former chief financial officer Anoj Singh, travelled to China where to meet a Huarong delegation for discussions.
Pillay said Eskom had decided to issue a Request for information notice, which he said was "a new process" as the power utility would normally have issued a request for Proposal to ensure there were no similar proposals out there. When the deal's "non-binding" term sheet was presented to Eskom, Pillay said he realised that there was a commitment fee of 0.8 percent amounting to $24 million, and a 0.2 percent cancellation fee amounting to $30 million if Eskom repudiated or cancelled the deal.
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