Upload
briana-chandler
View
232
Download
0
Tags:
Embed Size (px)
Citation preview
ESKOMESKOM
PRESENTATION TO THE PORTFOLIO PRESENTATION TO THE PORTFOLIO COMMITTEE DMECOMMITTEE DME
9 May 20019 May 2001
ESKOMESKOM 2001 OBJECTIVES
REGULATED BUSINESSREGULATED BUSINESS
GenerationGeneration
TransmissionTransmission
DistributionDistribution
CONTENTSCONTENTS
BACKGROUNDBACKGROUND
BUSINESS OBJECTIVES 2001BUSINESS OBJECTIVES 2001
BACKGROUNDBACKGROUND
STRATEGIC INTENTSTRATEGIC INTENT
Eskom will be the pre-eminent African energy and related services business, of global stature
KEY ISSUESKEY ISSUES
Clarity on Governance and Regulatory Clarity on Governance and Regulatory
Framework Framework
Provide strength and stability through Provide strength and stability through
the process of restructuringthe process of restructuring
Maintaining excellence in customer and Maintaining excellence in customer and
business performancebusiness performance
KEY ISSUESKEY ISSUESResearch and DevelopmentResearch and Development
Major projectsMajor projects Pebble Bed Modular ReactorPebble Bed Modular Reactor
– Cabinet ApprovalCabinet Approval
– EIAEIA
– Detailed feasibility studyDetailed feasibility study
Other projects e.g. wind, solar power,fuel cellsOther projects e.g. wind, solar power,fuel cells
PilotsPilots planned - planned - PBMR, wind, solar thermal and PBMR, wind, solar thermal and discard coal repoweringdiscard coal repowering
KEY ISSUESKEY ISSUES
GovernanceGovernance
Incorporation of Eskom (Eskom Incorporation of Eskom (Eskom
Conversion Bill)Conversion Bill)
Shareholder CompactShareholder Compact– Clear mandate from Government as Clear mandate from Government as
ShareholderShareholder
– Mutual understanding and Mutual understanding and
commitment to initiatives to commitment to initiatives to
achieve strategic intentachieve strategic intent
KEY ISSUESKEY ISSUES
Regulatory FrameworkRegulatory Framework
Need to address the following:Need to address the following:– Methodology (Legislation - Regulatory Bill)Methodology (Legislation - Regulatory Bill)
– Price increase approval process Price increase approval process
– Definition of Regulatory model (market Definition of Regulatory model (market
model)model)
Imperatives for current business needsImperatives for current business needs
Pre-condition for introduction of Pre-condition for introduction of
competition in the ESIcompetition in the ESI
KEY ISSUESKEY ISSUES
Restructuring PrinciplesRestructuring Principles Should be informed by:Should be informed by:– Government’s objectives and policy Government’s objectives and policy
(Energy White Paper)(Energy White Paper)
– International experience and expertiseInternational experience and expertise
– Unique SA situationUnique SA situation
– Need to preserve existing strengths within Need to preserve existing strengths within
the industrythe industry
– Stakeholders inputStakeholders input
– Eskom’s strategic intent, in respect of Eskom’s strategic intent, in respect of
EskomEskom
BUSINESS OBJECTIVES 2001BUSINESS OBJECTIVES 2001
OVERVIEW OF FINANCIAL RESULTSOVERVIEW OF FINANCIAL RESULTS
Eskom Financial Performance:Eskom Financial Performance:
2000 %
1999%
Change
Net Income R'm (before tax) 3,213 2,062 55.8%
Net Income R'm (before tax and depreciation life adjust.) 2,572 2,062 24.7%
Return on Asset (Historical) 9.95 8.26 20.5%
Debt-Equity 0.68 0.89 23.6%
Electricity Sales Growth 2.8% 1.1%
Productivity R'm (Regulated Business) 428 (351)
ESKOM 2001 OBJECTIVES ESKOM 2001 OBJECTIVES
ObjectivesObjectives
FinancialFinancial
Financial performanceFinancial performance
Economic, efficient and effective use of operating and capital resources
Maintain financial independence
KPIs and targetsKPIs and targets
Productivity improvement not less than 2,5%
Total electricity cost not to exceed R120,08/MWh
Resources accessed without recourse to Government
-50
250
550
850
1150
1450
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
R’m R’m (2000 Rands(2000 Rands))
CUMULATIVE PRODUCTIVITYCUMULATIVE PRODUCTIVITYIMPROVEMENT FOR ALL RESOURCESIMPROVEMENT FOR ALL RESOURCES
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
FinancialFinancial
Financial performanceFinancial performance
Long-term financial viability
KPIs and targetsKPIs and targets
Net profit - R3 342 million
After tax - R2 122 million
Debt-equity ratio less than 0,6
Sales growth - 2,4% in GWh 6,1% in Rm
DEBT : EQUITYDEBT : EQUITY
0.5
0.9
1.3
1.7
2.1
2.5
2.9
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
100
110
120
130
140
150
160
170
180
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
TWh TWh
TWh SOLDTWh SOLD
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
FinancialFinancial
Maintain good governanceMaintain good governance
Improve discipline, governance and accountability to support strategic intent and new business
KPIs and targetsKPIs and targets
Shareholder compact approved and implemented
Effective governance structures and processes implemented
Effective internal controls in place
PFMA training
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
FinancialFinancial
Information SystemsInformation Systems
Information Systems strategy aligned with changing environment
KPIs and targetsKPIs and targets
Enabling agreement and service level agreements between Eskom and arivia.kom
Review and align information system strategy to support transformation
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
TechnicalTechnical
Technical performanceTechnical performance
Maintain excellent technical performance
KPIs and targetsKPIs and targets
Sustainability index - 80%
Generation plant performance- Energy Availability Factor - 90%- Unplanned Automatic Grid
Separations - 1,7
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
TechnicalTechnical
Technical performanceTechnical performance
Maintain excellent Transmission system performance
KPIs and targetsKPIs and targets
Transmission system performance
Supply Interruptions:- No incidents with a
severity greater than or equal to one
- System Minutes lost not to exceed 6,2
TECHNICAL PERFORMANCETECHNICAL PERFORMANCE
82.083.084.085.086.087.088.089.090.091.092.093.0
Actual1999
Actual2000
Target2001
Unipede Median = 85.8
Energy Availability Energy Availability Factor (EAF)Factor (EAF)
%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Actual1999
Actual2000
Target2001
Total System Total System Minutes LostMinutes Lost
Minutes
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Actual1999
Actual2000
Target2001
Unipede Median = 3.4
Unplanned Unplanned Automatic Grid Automatic Grid Separations per Separations per
7000 hours7000 hours
Number
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
Customer Customer SatisfactionSatisfaction
Customer managementCustomer managementPerception of customers
RegulationRegulation
Clear regulatory framework
KPIs and targetsKPIs and targets
Customer satisfaction levels, PreCare and MaxiCare, at least 8 on a scale of 1 to 10
Input into design of an appropriate regulatory framework
60
70
80
90
100
110
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Deflated by consumer price index Deflated by consumer price index Base = 100 in 1990Base = 100 in 1990
ELECTRICITY TARIFF INCREASEELECTRICITY TARIFF INCREASE
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
Human resource Human resource alignmentalignment
Implement employment equity
KPIs and targetsKPIs and targets
Percentage of black management, professional and supervisory staff to exceed 50,7%
Percentage of women management, professional and supervisory staff to exceed 18,4%
Develop and implement friendly disabled person policy
STAFF PROFILESTAFF PROFILE
0
5
10
15
20
25
30
35
40
45
50
55
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
%
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
Human resource Human resource
alignmentalignmentAlign human resource management to support the strategic intent
KPIs and targetsKPIs and targets
Intellectual capital managed and retained
Transformational leadership development program
Reward systems updated
Human resources policies reviewed
Human resources sustainability index implemented
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
Human resourceHuman resource
alignmentalignment
Maintain consultative processes and structures
Managing the impact of HIV/AIDS
Ensure people are ready for change
KPIs and targetsKPIs and targets
Processes and structures in place
Response strategies to HIV/Aids surveillance and financial impact study findings implemented
Leadership empowered to
manage change
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
Human resourceHuman resource
alignmentalignment
SafetySafety
Improve safety
KPIs and targetsKPIs and targets
Disabling injury incidence rate - less than 0,4
Work-related and public fatalities to be lower than previous year
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
Socio economicSocio economic
Black economic Black economic empowermentempowerment
Encourage black enterprise development
ElectrificationElectrification
To electrify additional homes during 2001
KPIs and targetsKPIs and targets
Procurement expenditure - R 2 647,5 million
including VAT
186 370 homes to be
electrified
ELECTRIFICATIONELECTRIFICATIONCumulative number of homes connectedCumulative number of homes connected
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
2,100,000
2,400,000
2,700,000
3,000,000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
EnvironmentalEnvironmental
Protecting environmentProtecting environment
Environmental management systems compliant with SABS ISO14001 by end 2002
KPIs and targetsKPIs and targets
Action plans in place
ESKOM 2001 OBJECTIVESESKOM 2001 OBJECTIVES
ObjectivesObjectives
EnvironmentalEnvironmental
Protecting environmentProtecting environment
Impact on environment
KPIs and targetsKPIs and targets
Environmental legislation contraventions - 0
Relative water consumption - 1,26/kWh
Particulate emissions - 0,33 kg/MWh
Radiation exposure - 0,25mSv
Lit
res
Lit
res
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
ENVIRONMENTAL PERFORMANCEENVIRONMENTAL PERFORMANCEWater Consumed per kWh Sent outWater Consumed per kWh Sent out
ENVIRONMENTAL PERFORMANCEENVIRONMENTAL PERFORMANCEParticulate Emissions Relative to Particulate Emissions Relative to
Energy Sent OutEnergy Sent Out
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
kgkg
CONCLUSIONCONCLUSION