Water Technical Plan projects

Monthly review

20 September 2012
 Kriel Matla Pipeline Refurbishment and New Bypass
Pipeline Construction Project
Objectives: To ensure the availability and reliability of the infrastructure supplying water to Kriel and Matla Power Stations

1. Overall progress 2. Key Performance drivers

 Project in execution phase  Enablers – weekly site meeting
 Site establishment completed  Constraints – Unmarked 11kV cable on right of way
 Construction commenced (10% in progress)  Challenges – Stakeholders engagement – coordination between
 All long lead items have been ordered and 80% of the items have power stations personnel , PED Water operations, and the
been delivered project team

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 Site establishment completed

Execution
 Construction of the new bypass pipeline commenced (10%) Program Variance
 Delivery of the major equipment (80%)
Milestones not met: Current FY

Finances
 Trial shutdown of the Kriel Matla water pipeline ITD
 Trial shut down risk assessment CTC
 ERA revision for 5th September R300M Investment Committee

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 Civil contractor over contracted by R5M, no money for site • Condonation for over contracting on the civil contractor
supervision from November ‘12 - Revise ERA
 Unmarked 11kV electrical cable unearthed where the new bypass
pipeline needs to be tied in – Relocate electrical cable – Revise
ERA
 2 day return to service strategy during cement mortar lining not
tendered for - requested the contractor to incorporate and price –
Revise ERA
 Wintershoek Pumps Replacement Project
Objectives: To ensure the availability and reliability of the infrastructure at the Wintershoek Pump Station (KWS)

1. Overall progress 2. Key Performance drivers

 Project in execution phase  Enablers – Monthly progress meetings
 Major parts for all 4 pumps manufactured, some are still being  Constraints – None
machined  Challenges – Defects on major parts causing a major delay
 Site work not commenced yet

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 Received major parts for all 4 pumps

Execution
 2nd pump casing passed pressure test Program Variance
 Civil contractor nominated
Milestones not met: Current FY

Finances
 1st pump casing pressure test failed ; repair method rejected by ITD
Eskom engineering. Contractor need to manufacture new casing – CTC
will results in delays

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 1st pump casing rejection will result in delays – ensure that it is still
completed in FY13
 Vygeboom Motors Replacement Project
Objectives: To ensure the availability and reliability of the infrastructure at the Vygeboom Pump Station (KWS)

1. Overall progress 2. Key Performance drivers

 Project in definition phase  Enablers – Representative project team
 Feasibility studies, design , works and site information completed  Constraints – None
by Group Technology  Challenges – None
 SHE requirements submitted

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 Project scheduled revised

Execution
 Design and feasibility reports from Group Technology Program Variance
 SHE requirements
Milestones not met: Current FY

Finances
 Cost estimate ITD
 Economic evaluation CTC
 PDRA
 ERA submission
Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 Money was budgeted to be spent in FY13 – project schedule
revised and budget updated
 Action log
Completed
Outstanding greater than a month
Date: 20/09/2012
Outstanding less than a month
Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1 … … … … … … … …

Proposed action items to address the current priority issues identified

Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1

5
End of Strategic Initiative Review

6
PED Projects – Stage 1
CPMO
CPMO Project

Initiative objectives: The CPMO project was set up to focus on optimising the performance at the existing 6 Cost Plus Mines, in order to:
Improve TCO R/GJ performance, influence pre-requisites for long-term sustainable improvements and set-up a continuous improvement process
1. Overall initiative progress this month 2. Key Performance drivers
▪ AATC - The entry level parameters for New Denmark and Kriel are
being finalised. Implementation of initiatives progressing at the 3 mines. ▪ Enablers – Internal PED alignment on optimisation agreement
Initial feedback on AATC internal analysis is that further internal work is parameters (starting points, targets) and buy-in from each
required and hence a delay in negotiations. First draft of the incentive mining house and mine on the need to improve.
agreement received from external attorneys and is being reviewed.
▪ Constraints –Legacy issues and skills shortage at the mines
▪ BECSA - Re-looking at options at BECSA and discussions on proposals and PED.
to take the process forward due to the declining resource profile are
currently on-going. ▪ Challenges – AATC prioritisation of the negotiation process.
▪ EXXARO - Phase 2 implementation at the 2 mines is in progress.
Internal (CPMO & Technical department) workshop was held for
alignment on the principles of the optimisation and linked incentive
scheme and parameters for starting points. Shared the Eskom reporting
and tracking principles with Exxaro and developed reporting template Current Q1 Q3 Q4

Reporting
Planning
3. Quarterly performance against milestones General Planning
which is in the process of being finalised.

&
PLCM Readiness
Reporting quality
Milestones achieved:

Executio
▪ Exxaro phase 2, which is implementation of identified initiatives including Program Variance

n
training and change management is gaining momentum and on track as
per the project plan. Current FY
Milestones not met: Realisatio Finances ITD
CTC
▪ Finalise New Vaal Negotiations.
▪ BECSA diagnostics review on hold for now.
Benefits

Leading indicators
▪ Exxaro incentive scheme negotiations.
n

Lagging indicators
4. Risks and corrective actions Good Moderate Poor

5. Manco/divisional support or decisions required

▪ Negotiation timelines have slipped with AATC. Options on way forward
being considered internally to fast track the process.
▪ Divisional:
▪ Historical issues continue to have an impact. Continue to drive separately.
▪ Potential impact of the optimisation process not going forward at BECSA.
▪ PED support during the negotiation process with the MH
FTS will be applied as mitigation.
▪ Manco (feedback from initiative review meeting):
Primavera Plan – High level

Source: team analysis 9

 Action log
Completed
Outstanding greater than a quarter

Outstanding less than a quarter

Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1 … … … … … … … …

Proposed action items to address the current priority issues identified

Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1

10
End of Strategic Initiative Review

11
EDU MRC – Strategic Initiatives
quarterly review
Current status and Manco reporting

September 2012
 Defunct mines liability management: Overall Status
Initiative objectives: Develop a liability management plan and execute to manage Eskom’s obligations for rehabilitation and closure for the defunct
mines.
1. Overall initiative progress 2. Key Performance drivers
▪ Liability management plan (LMP) and strategies to manage defunct mines
developed. ▪ Enablers – Monthly technical meetings with C&M providers, support
▪ Final legal opinions received, revised strategies presented to DE, comment from legal, engineering and commercial.
to finalise position on statutory liability. ▪ Constraints – Legal process has no guaranteed timelines for decision
▪ Closure study for Usutu colliery complete, Vierfontein final report received. making and planning purposes.
Coalbrook due end October. ▪ Challenges – Eskom information and records are lacking and present
▪ Approach to engage DMR and Anglo Operations Limited regarding statutory dilemmas for decision making. Decisions by regulators not forthcoming.
liability being finalised with Corporate Legal.
▪ Eskom and BECSA legal teams to meet on the 18th September to clarify
statutory liability as well as a joint water management solution for Current Q1 Q2 Q4

Reporting
Planning
Kilbarchan and Roy Point. General Planning

nance
▪

&
Request from BECSA to dispose Usutu Colliery surface & infrastructure, PLCM Readiness
opportunity for Eskom to be released from financial obligations for care and Reporting quality
maintenance and closure.

Execution
▪ Request from Anglo to dispose Arnot Opencast mining right, opportunity for
Eskom to be released from financial obligations for care and maintenance Program Variance
and closure.
Current FY

Finances
3. Quarterly performance against milestones ITD
CTC
Milestones achieved:
▪ Care and maintenance plans executed as planned, no safety or

Realisation
environmental incidents or contraventions. Benefits Leading indicators
▪ Engagement with Anglo-Optimum and Arnot Power Station to resolve Lagging indicators
Optimum off-take from ALZU potable water line.
▪ Copy of Directive from DMR to OSHO received, BECSA to assist to ensure Good Moderate Poor
rehabilitation in accordance with dump design.
▪ Milestones not met: 5. Manco/divisional support or decisions required
▪ Kilbarchan arbitration in favour of BECSA, ongoing interactions through • Support interaction with BECSA and Anglo to discuss Eskom being released
legal teams did not take place on 06 September, postponed by BECSA. from contractual obligations through the sale of Usutu Colliery (surface &
infrastructure) to Vunene Mining and the sale of Arnot Opencast mining right to
Optimum Coal respectively.
4. Risks and corrective actions

▪ Kilbarchan decanting ~0.5ML/day. Engagement with BECSA in process to

clarify responsibilities for managing the site.
 Action log
Completed
Outstanding greater than a quarter
Date: 20/09/2012
Outstanding less than a quarter
Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1 Kilbarchan Regulations in force Legal team have N Required Uncontrolled Ongoing Ongoing.
Arbitration at the time of challenged BECSA in Govender asap. decant and management of
made in favor concluding the terms of their statutory impact on the the site by BECSA
of BECSA. Management & Coal obligation to manage the water course. and a joint water
BECSA has Offtake agreement site even if at Eskom’s management
indicated do not impose this cost. solution with
their intention obligation on Meeting with BECSA to Eskom for
to hand over BECSA. take place on the 18th Kilbarchan and
management September. The previous Roy Point.
of the site to option of a joint water
Eskom. management solution is to
be explored.

Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1 • Seek recourse via the asap Areas rehabilitated
Prospecting Delay by DMR to N Govender Exposed areas
DMR national office to to comply with the
damage at issue the necessary will compound
resolve. original dump
Kilbarchan directive to OSHO to air and water
• OSHO has submitted a design
not rehabilitate affected ingress that will
copy of the directive specifications.
rehabilitated areas. complicate
issued by the DMR..
by OSHO aspirations to
Eskom to seek
obtain a closure
assistance from
certificate.
BECSA for the dump
designs to enable
OSHO to rehabilitate
effectively. 14
End of Strategic Initiative Review

15
Khutala

Monthly review

20 September 2012
Khutala – Mini Pits (Haraka)
Objectives: To mitigate the projected shortfall from the Khutala Colliery by advancing mini-pits primed for development.

1. Overall progress 2. Key Performance drivers

 Project in definition phase  Enablers – bi-weekly technical meeting; monthly combined

 Light option selected. Steering Committee
 Option being developed through feasibility study  Constraints – Timelines are critical to mitigate the gap between
underground and large opencast operations
 Challenges – Cost of coal with respect to market; legal
obligation to develop Khutala versus “Failure to supply”

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 DRA

Execution
 PDRA Program Variance
 Letter of approval of Haraka Light DPS transmitted to BECSA
 Stakeholder kickoff meeting held 17/9 Current FY

Finances
Milestones not met: ITD
 N/A CTC

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 N/A  N/A
Khutala – Large Opencast (Kipanya)
Objectives: To secure Kendal’s long term coal supply by developing amongst others the Khutala Colliery.

1. Overall progress 2. Key Performance drivers

 Project in concept phase  Enablers – bi-weekly technical meeting; monthly combined

 Option being developed through pre-feasibility study Steering Committee
 Constraints – Timelines are critical
 Challenges – Supplier development and localisation
requirements, Kendal overall strategy

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 Project Scheduled: 16% Actual 15%

Execution
Milestones not met: Program Variance
 N/A
Current FY

Finances
ITD
CTC

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 Legal: Eskom may loose the right to claim failure to supply if it does  N/A
not support development – Legal opinion being sought
 Kendal strategy: Khutala may not be the best option for Kendal in the
long term – Kendal strategy being developed to re-confirm the 2008
mandate.
 Action log
Completed
Outstanding greater than a month
Date: 20/9/2012
Outstanding less than a month
Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1 TBD … … … … … … …

Proposed action items to address the current priority issues identified

Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1

19
Road to Rail Migration Project

Status Update

September 2012
 Tutuka Coal Terminal Phase 1 and Phase 2
Objectives: Ensure that the transport of coal is done in the most cost optimal manner i.e., conveyor or rail

1. Overall progress 2. Key Performance drivers

 Project in execution phase :Phase 1  Enablers – weekly site meeting
 Project progress 95% completion  Constraints – Delay roof sheeting
 Rail Operation had started  Challenges – Working during operation and cooperation from the
 Phase 2 tippler :PDRA phase farms


Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 Phase 1 Project Completion is December 2012

Execution
 Phase 2 Project Completion December 2015 Program Variance
Milestones not met:
 Roof sheeting Current FY

Finances
ITD
CTC

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 Phase 1: Delay on roof sheeting – accelerate roofing before raining • None
season
 Phase 2 : PDRA delay due to insufficient information – team to
review and generate outstanding documents
Camden Coal Terminals Improvement Project (Road
to Rail Migration Strategic Initiative)
Initiative objectives: The Ultimate objective of Phase 1B short term infrastructural improvements is to increase the throughput
of Coal by 20% to 2.7Mtpa and with a view to eliminate Road transport entirely
1. Overall initiative progress 2. Key Performance drivers
▪ Project scope defined and scheduled.
▪ ERA Extension ▪ Enablers – Weekly Project Team meetings; Weekly schedule updates.
▪ Roshcon to be nominated as the Main Contractor ▪ Constraints – Limited staff allocated to the project.
▪ Studies – GOBA and Bigen Africa ▪ Challenges – Inter departmental challenges with regards to the
population of critical Financials data.

Current Q1 Q2 Q4

Reporting
Planning
3. Quarterly performance against milestones General Planning

&
PLCM Readiness
Reporting quality
Milestones achieved:

Execution
▪ 100% of the URS has been achieved.
▪ 100% Initial Budget Estimate excl IDC Program Variance
▪ 60% of the ERA has been compiled
Current FY

Finances
Milestones not met: ITD
▪ ERA Finalisation CTC
▪ Detailed Design Report incomplete

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

▪ Significant delays on the Construction start days may exacerbate the
road transport conditions due to imminent summer rains.
• Safety Implications are increasing negatively • Approval of the ERA
• Risk to not meeting the required increase in the throughput within
current FY
▪ Camden Coal Terminals Improvement project seen as strategic initiative.
 Majuba Heavy Haul Line and Second Tippler
Objectives: Ensure that the transport of coal is done in the most cost optimal manner i.e., conveyor or rail

1. Overall progress 2. Key Performance drivers

 Ermelo –Majuba Haul Line :Project in procurement stage  Enablers – weekly site meeting
 Second tippler DRA phase  Constraints – PFMA approval
 Challenges – Delay on the approval of PFMA by Department of
Public Enterprise

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 Ermelo –Majuba Haul Line : Project Design Completed

Execution
 Second tippler : Design process Program Variance
 Milestones not met:
 None Current FY

Finances
ITD
CTC

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 Project delay due to PFMA not approve – to be escalated • Eskom to engaged DPE

 Grootvlei Coal Terminal ,Tippler and Convey Belt
Objectives: Ensure that the transport of coal is done in the most cost optimal manner i.e., conveyor or rail

1. Overall progress 2. Key Performance drivers

 Phase 1 : Grootvlei Coal Terminal DRA phase  Enablers – Weekly meeting
 Phase 2 : Tippler and Convey Belt  Constraints – None
 Challenges – None

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 Phase 1 : Grootvlei Coal Terminal DRA phase on progress

Execution
 Phase 2 : Tippler and Convey Belt on progress Program Variance
 Milestones not met:
 None Current FY

Finances
ITD
CTC

Realisation
Benefits Leading indicators
Lagging indicators
Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 None • None

 Action log
Completed
Outstanding greater than a month
Date: 18/09/2012
Outstanding less than a month
Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1 … … … … … … … …

Proposed action items to address the current priority issues identified

Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1

25
Thank you
Waterberg Development project
Sagie Chetty: Project Leader, or Phiwa Makhoba: Project Manager
Objectives: Progressing the Waterberg development in order to source the coal to meet the depleting coal resources and deteriorating coal
qualities in Mpumalanga

1. Overall progress 2. Key Performance drivers

 Project in concept phase (CRA)  Enablers – Project team meetings weekly and the weekly
 Have an MoU with Sekoko for 10Mtpa Executive feedback session
 Currently negotiating an MoU with Ledjadja  Constraints – None
 Coal quality testing at Majuba being considered with the  Challenges – None
Majuba team

Current Q1 Q2 Q4

Reporting
Planning
3. Monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
 MCWAPII Presented at PED Bus Strat Align, next committee is

Execution
the PED R300M Tender committee and EXCOPS
 Discussions with the Majuba team for the risk assessment and Program Variance
drafting a procedure for the full combustion test is progressing
well Current FY

Finances
 Motivation for hiring a consultant to draft a framework for green ITD
mining has been approved by DE CTC
Milestones not met:

Realisation
 TFR mandate to negotiate an MoU presented at PED Bus Strat Benefits Leading indicators
Align but can’t proceed to the next level, a full commercial Lagging indicators
strategy is needed before the team can proceed Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

 Delay in getting the coal tested at Majuba – engaging the Majuba
 None
guys and making them to fully understand and appreciation the
possible implications
PED Operation Centre

monthly review
Current status and project stage 2 meeting reporting

20 September 2012
 PED OPERATIONS CENTRE
Initiative objectives: 1. Construction of PED operation center in Megawatt park . The venue should be ergonomically friendly to support a 24/7/365 operation and be adequately sized to
accommodate seating to monitor all PED’s operational requirement.2. The PED integrated control centre will be a 24/7 operation to monitor critical operational information in the functional areas
of Primary Energy. An integrated system is required to provide unifying system coverage of Primary Energy end-to-end business processes, which will allow decision makers (operational and
managerial) to be well informed on mission critical operations.

1. Overall initiative progress 2. Key Performance drivers

▪ Evaluation of tenders has been completed and a report with ▪ Enablers – weekly meeting with Eskom properties
recommendation will be presented to the 3M tender committee ▪ Clarity on some of detail aspects of operating model
▪ The project remains in high risk range but intensive and affecting the Ops Centre
focussed drive from PED and Group IT Programme Managers to ▪ Process definition and documentation
mitigate risks and get progress back on track ▪ Staffing strategy
▪ Short , medium and long term approach formulated and busy ▪ Constraints – People , Process and Technology
obtaining support from PED and Group IT stakeholders ▪ Challenges – Immense focus on PED from SAP, Quick win projects and
PED Programme will require coordination
Current Q1 Q2 Q4

Reporting
Planning
3. monthly performance against milestones General Planning

&
PLCM Readiness
Milestones achieved: Reporting quality
• Closing of tenders and performing technical evaluations

Execution
• Successful Integration meeting held as basis for one integrated Program Variance
facility plan ( one view of IT and civil tasks)
• 80% Confirmation of Bill of Material items Current FY
Budget is with

Finances
Eskom
• Formal prioritisation of PED report development requirement ITD properties
Milestones not met: CTC
▪ Awarding a contract the prospective contractor after the due

Realisation
process
Benefits Leading indicators
▪ Finalised integrated facility plan
Lagging indicators
▪ Still to finalise details of video conferencing and teleconferencing
for Bill of Material purposes Good Moderate Poor

4. Risks and corrective actions 5. Manco/divisional support or decisions required

▪ No end users to engage in Centre establishment poses risk of new • Support for a Joint IT and PED Steering Committee to drive IT related projects
requirements surfacing at later stage. Corrective action: Use RC3 and quick wins
and GCIC users to obtain input and opinions around practical
aspects of facilities
• Challenges with source data availability ,lack of automation and
integration gaps constrains the effectiveness of the operations
centre. Corrective action : Obtain acceptance for iterative approach
starting with having visibility of available data and use as basis for
systematic improvement
 Action log
Completed
Outstanding greater than a month
Date: 20/09/2012
Outstanding less than a month
Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1 … … … … … … … …

Proposed action items to address the current priority issues identified

Proposed Expected
Item & Action required to completion impact if not Definition of Date
No. Status Specific root cause address root cause Owner deadline resolved success Completed
1

30
End of Strategic Initiative Review

31