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INTEGRATED RESULTS PRESENTATION
KING III APPLICATION
 
   



Shareholder's compact

The South African government, represented by the Minister of Public Enterprises, is Eskom’s sole shareholder

Each year, in consultation with the shareholder, Eskom agrees on its performance objectives, measures and indicators, as well as its annual targets, in line with the Public Finance Management Act (1999).

The table below sets out Eskom's performance for the year to 31 March 2014 in terms of the shareholder’s compact. All key performance indicators (KPIs) on the compact refer to the Eskom company only. Commentary on performance is contained in the “Performance on strategic objectives” section of this report.

Key performance indicators of the shareholder’s compact

Key performance
areas
  Performance
indicator
  Unit   Target
2013/14
  Target
achieved?
  Actual
2013/14
  Actual
2012/13
  Actual
2011/12
  Page
ref
Focus on safety   Employee lost-time incidence rate (LTIR)   Index   0.36   Tick   0.31   0.401   0.41   85
Keep the lights on   Maintenance backlog reduction based on Eskom technical governance committee approval   Number   0   Tick   0     n/a   106,
114
IDM demand savings   MW   379   Tick   410   595   365   106,
111
Internal energy efficiency   GWh   15.0   Tick   19.4   28.9   45.0   106,
113
Put customer at the centre   Customer service index   Index   88.7   Cross   86.6   86.8   85.6   96
Improve operations   Normal UCLF2   %   10.00   Cross   12.61   12.12   7.97   89,
91
Less: Constrained UCLF3   %       1.63   3.41    
Underlying UCLF4   %       10.98   8.71    
EAF   %   80.0   Cross   75.13   77.65   81.99  
Total system minutes lost for events <1 minute   Minutes   3.40   Tick   3.05   3.52   4.73   89,
93
SAIDI5   Hours   45.0   Tick   37.0   41.9   45.8  
Deliver capital expansion   Generation capacity installed and commissioned   MW   100   Tick   120   261   535   117
Transmission lines installed   Km   770.0   Tick   810.9   787.1   631.0   117,
123
Transmission capacity installed and commissioned   MVA   3 790   Tick   3 790   3 580   2 525  
Generation new build capacity milestones (Medupi, Kusile and Ingula)   Days
deviation
  30.00   Cross   48.90   43.48   n/a   117
Reduce environmental footprint in existing fleet   Relative particulate emissions   kg/MWh   0.36   Tick   0.35   0.35   0.31   128
Water usage per kWh sent out6   L/kWhSO   1.39   Tick   1.35   1.42   1.34   128,
129
Implementing coal haulage and the road-to-rail migration plan   Coal road-to-rail migration   Mt   11.48   Tick   11.58   10.12   8.50   141
Ensure financial sustainability7   Cost of electricity (excluding depreciation)   R/MWh   453.40   Cross   541.92   496.24   374.19   153
Interest cover   Ratio   1.18   Cross   0.65   0.27   3.27   155
Debt:equity (including long-term provisions)   Ratio   2.17   Equals   2.21   1.96   1.69  
Free funds from operations (FFO) as % of total debt   %   9.11   Tick   9.21   8.55   15.06  
Build strong skills (total pipeline or new enrolments)   Training spend as % of gross employee benefit costs8   %   5.00   Tick   7.87       100
Engineers   Number   2 007   Cross   1 962   2 144   2 273  
Technicians   Number   780   Tick   815   835   844  
Artisans   Number   2 619   Cross   2 383   2 847   2 598  
Youth programme9   Number   5 000   Cross   4 325   5 701   5 159  
Maximise socio-economic contribution   Local sourcing in procurement   %   52.0   Tick   54.6   80.2   77.2   148
Procurement from B-BBEE compliant companies   %   75.0   Tick   93.9   86.3   73.2  
Procurement from black youth-owned companies   %   1.0   Tick   1.0   1.0    
Employment equity – disability   %   3.00   Equals   2.99   2.59   2.49   151
Racial equity in senior management,
% of black employees
  %   61.0   Equals   59.5   58.3   53.9  
Gender equity in senior management,
% of female employees
  %   30.0   Equals   28.9   28.2   24.3  
Racial equity in professionals and middle management,
% of black employees
  %   71.0   Tick   71.2   69.6   65.7  
Gender equity in professionals and middle management,
% of female employees
  %   36.0   Equals   35.8   34.6   32.4  

1. One noise-induced hearing loss late report by Generation and one LTI incident for Distribution resulted in the signed off LTIR of 2012/13 changing from 0.39 to 0.40.
2. Normal UCLF – measures the lost energy due to unplanned energy losses resulting from equipment failures and other plant conditions.
3. Constrained UCLF – This is UCLF that was a result of emissions and short-term related UCLF due to system constraints to meet the “Keeping the lights on” objective. This is apportioned between PCLF and OCLF.
4. Underlying UCLF – This is the difference between normal and constrained UCLF and that is still within Generation’s control.
5. SAIDI is an availability of supply index – the average duration (hours) of a sustained interruption the customer would experience per annum (number of hours per annum).
6. The volume of water consumed per unit of generated power from commissioned power stations.
7. The original year to 31 March 2014 budget which was included for the shareholder compact was subsequently revised and the differences mainly result from additional operating expenditure allocated to Generation. The revised budget ratios are as follows:

Cost of electricity (excluding depreciation) 463.25 R/MWh
Interest cover (excluding remeasurement of the shareholder loan) 0.98
Debt/equity 2.19
FFO as a % of gross debt 10.51%
8. This is a new measure, effective from 1 April 2013.
9. Includes learners trained by Eskom, as well as learners trained by Eskom’s suppliers.

Artisan training is provided at the Eskom
Academy of Learning in Johannesburg