Eskom Enterprises SOC Limited group


Eskom Enterprises (EE) provides life-cycle support, plant maintenance, network protection and support for the capital expansion programme for all Eskom’s divisions. This is done primarily through the operating divisions of EE and its two main subsidiaries, Rotek Industries SOC Limited (Rotek) and Roshcon SOC Limited (Roshcon).

Eskom Enterprises SOC Limited group structure

Eskom Enterprises SOC Limited has the following subsidiaries:

Rotek Industries SOC Limited
Roshcon SOC Limited
Eskom Uganda Limited
Eskom Energie Manantali s.a
Pebble Bed Modular Reactor SOC Limited
South Dunes Coal Terminal Company SOC Limited
Golang Coal SOC Limited
Technology Services International SOC Limited – this subsidiary is currently dormant, Eskom has applied for PFMA approval to close this subsidiary
Rosherville Properties SOC Limited – dormant

Operating highlights

Improved alignment to ensure that the subsidiaries support Eskom’s main operating businesses and its strategic intent
PFMA approval obtained for the sale of EE assets to Eskom and the integration of Rotek and Roshcon into one company. The conditions attached to the approval have been met and preparation is in progress to effect the approvals received

Operating challenges

Declining safety performance in EE, Rotek and Roshcon
Balancing the outage programme and ensuring more optimal utilisation of assets and resources

Future focus areas

Safety improvement initiatives in Rotek and Roshcon by increasing behavioural safety observations. Continuing the Rotek/Roshcon “zero tolerance, target zero” initiative as an activator for safety improvements
Reposition the divisional assets of EE into Eskom
Integrate Rotek and Roshcon into a single company producing high-quality products and focused on meeting Eskom’s needs in a cost-effective manner
Conclude the exit from Eskom Energie Manantali s.a (EEM) as per the guidance received from the shareholder
Restructure South Dunes Coal Terminal (SDCT) and Golang Coal to simplify the group structure
Finalise the long-term strategy for investments in Trans Africa Projects (Pty) Limited and Eskom Uganda Limited to align with the Eskom Africa strategy


During the 2014 financial year the group performed well, exceeding targets in most areas. The Eskom Enterprises holding company has separate shareholder’s compacts with its main operating subsidiaries. Similarly, Eskom Enterprises has a compact with Eskom (as depicted in the table below).

Eskom Enterprises SOC Limited shareholder’s compact (company only)

Indicator and unit Target
Fatalities – employees, number 0   0   0   0  
Fatalities – contractors, number 0   0   0   0  
Lost-time incidence rate – employees, index 0.36   0.53   0   0.17  
Lost-time incidence rate – contractors, index 0.36   0   0   0  
Eskom Telecommunications backbone network availability, % 99.78   99.84   99.84   99.79  
Use of rotary-wing fleet, hours 4 300   4 653   4 442   4 709  
EBITDA, R million 179   372   282   181  
Profit before tax, R million 96   354   264   163  
Racial equity – senior management, % 69.70   66.67   68.00   67.13  
Gender equity – senior management, % 35.10   33.33   25.00   25.00  
Racial equity – professionals and middle management, % 57.50   56.25   50.60   n/a  
Gender equity – professional and middle management, % 25.30   25.00   14.90   n/a  
Procurement from B-BBEE compliant suppliers, % 75.00   69.31   96.00   n/a  
Procurement from black women-owned suppliers, % 10.00   0.76   1.00   n/a  
Procurement from people with disabilities suppliers, % 1.5       n/a  

The employees of Eskom Enterprises have been seconded from Eskom to manage the assets of Eskom Enterprises. The racial and gender targets above were set prior to the restructuring and have not been changed upon the centralisation of the support functions. The financial performance of Eskom Enterprises for the year ending March 2014 was driven mainly by increased volumes of work and improved cost control, and the anticipated sale of the assets to Eskom.

Rotek Industries SOC Limited and Roshcon SOC Limited

The performance of Rotek and Roshcon was impacted by moving outages, lower transformer workshop utilisation, project delays, postponements and cancellations. Rotek and Roshcon’s technical performance varied, with most technical targets being met.

Eskom Uganda Limited

Eskom Uganda operates under an operating and maintenance concession with the electricity utility in Uganda. The concession tenure spans 20 years, and Eskom Uganda is currently in the tenth year of the concession period.

Financial and safety performance has been good, whilst risk and environmental management was fair. Numerous challenges are receiving the required management attention – asset management, operational excellence, stakeholder and reputation management, as well as people and talent management. The plant is old and continues to deteriorate with age, requiring continual plant life-cycle management and equipment upgrades.

A Ugandan parliamentary probe committee draft report recommended the termination of Eskom Uganda Limited as the generation asset manager for the Kiira and Nalubale hydropower stations for the remainder of the 20-year concession (which is approximately 10 years). The Eskom chairperson, together with a delegation of Eskom and Department of Public Enterprises officials, visited Uganda in March 2014 and interacted with various stakeholders of the country in an attempt to enhance Eskom’s reputation in Uganda.

The Eskom investment and finance committee has approved that Eskom Enterprises and Eskom Uganda remain in the investment until the end of the concession and possibly look at options to expand the current concession arrangements.

Eskom Energie Manantali s.a

Eskom Energie Manantali s.a (EEM) operates under an operating and maintenance concession with Société de Gestion de l’Energie de Manantali (SOGEM), an energy-management company based in Mali. The agreement entails that EEM operates and maintains SOGEM’s electricity utility, which supplies energy to Mali, Senegal and Mauritania.

At a meeting on 31 January 2014 in Addis Ababa, there was agreement that one more attempt should be made by EEM and SOGEM to reach agreement on a 10-year operating and maintenance contract, through mediation. The mediation was to be completed by early March 2014, and if it was not successful EEM would exit from the Manantali project by 30 April 2014.

There was significant progress on certain issues, where the parties reached agreement through the assistance of the jointly-appointed mediators. However, there remained significant concerns and potential risks for EEM that prevented a 10-year contract being agreed upon and entered into by the end of April 2014. The Minister of Public Enterprises concurred with the decision to exit, and is currently corresponding with the chairperson of the Organisation pour la Mise en Valeur du fleuve Sénégal (OMVS) Council of Ministers on the decision to exit.

Multi-axle logistics services at Eskom Rotek and Roshcon transport all abnormal loads for the Eskom group

As at 31 March 2014, EEM was classified as a discontinued operation, with the financial results for the period reported as such. Comparatives were restated accordingly.

Pebble Bed Modular Reactor (PBMR) SOC Limited

The original identified scope of intellectual property preservation performance figures stands at 98%. The cash balance remains closely controlled, and the available balance as at 31 March 2014 was R101.8 million, which is greater than the R50 million target set for the year. Risks that are managed to protect the cash relate to unplanned intellectual property preservation work, system configuration and other software maintenance and licences, hosting costs, and asset disposal costs.

South Dunes Coal Terminal SOC Limited and Golang Coal SOC Limited

Due to its investments in these two companies, Eskom is entitled to export three million tons of coal through the Richards Bay Coal Terminal. These export rights are being leased out by Eskom to other exporters while Eskom determines the long-term strategy for this investment.

The current lease arrangement expires in August 2014.