The Hitachi Power Africa deal

2014-04-26 00:00

NEWS of Chancellor House’s 25% stake in Hitachi Power Africa, which won a R38,5 billion Eskom boiler deal, came as South Africans braced for massive power price hikes.

Critics of the deal — including opposition parties and the trade unions — urged the ANC and Chancellor House to surrender its stake, described by many as a horrendous conflict of interest.

The deal’s detractors said the conflict of interest came in the ruling party directly benefiting in power price hikes because of Hitachi’s deal with Eskom. “It will become increasingly difficult for the ANC to deal with concerns that it may have accepted the National Energy Regulator’s [Nersa] determination because it stood to benefit,” Cosatu said at the time, according to the Mail & Guardian.

Estimates at the time were that the ANC would make R50 million in profit from the deal. The ANC vacillated on its Hitachi interest for years, even in the face of a probe by the public protector in 2009.

The public protector’s report identified a conflict of interest in then Eskom chairperson Valli Moosa’s ANC position at the time the Eskom board considered Hitachi’s Medupi boiler contract deal.

While the then Public Protector Lawrence Mushwana found that the deal was not unlawful, even with Moosa’s conflict of interest, he recommended a new law be passed to regulate business between the state and entities owned by political parties.

Finally in March this year, Chancellor House and the ANC confirmed it had sold its stake in February. Hitachi said the sale was done under “strict confidentiality about the terms and conditions of the contract”.

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