Eskom says it will recoup R150 million of an original R207 million in fees from Deloitte in an out of court settlement on Friday. File image: ANA
Eskom says it will recoup R150 million of an original R207 million in fees from Deloitte in an out of court settlement on Friday. File image: ANA

Eskom reaches R150 million out of court settlement with Deloitte

By ANA Reporter Time of article published Mar 20, 2020

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CAPE TOWN - Eskom said on Friday it had reached an out of court settlement with Deloitte that would see the international consulting firm repay R150 million of the original fees of R207 million it collected from the power utility. 

"The settlement amount was determined after extensive negotiation between the parties to avoid protracted and costly litigation," Eskom said in a statement.

The agreement is final and brings to an end five months of legal wrangling over Eskom's demand for a refund of the money, paid out to Deloitte from 2016 to 2017.

Eskom has maintained that Deloitte notched up the fees following an irregular procurement process, with former chairperson Jabu Mabuza describing the fees charged as five times higher than those of competing consulting firms.

The agreement reached on Friday states that there were technical irregularities in the procurement process but adds that investigations showed Deloitte was not involved in state capture or other forms of corruption.

Furthermore, the power utility accepts that it received value from the money it paid for the consulting work and still continues to benefit from it.

"There were technical irregularities within the procurement process, and Deloitte Consulting accepts that it participated in this irregular procurement process," the statement read.

"Deloitte Consulting is entitled to compensation for the value it delivered to Eskom."

In 2018, Eskom reached a settlement agreement with global consulting firm McKinsey for the return of R1 billion in fees for its work on a turnaround programme drafted for the utility in 2016.

African News Agency

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