As you will see throughout this report, Eskom is organising itself to deliver on its mandate for the decades ahead. We believe we have now positioned the organisation’s three major components – its managerial infrastructure and plans, its people, and the necessary financial resources – to help build South Africa and southern Africa’s exciting future.

It is a privilege for me to deliver this integrated report, the second since the transition phase when the roles of chairman and chief executive were entrusted to an interim chairman. On 15 June 2010, Brian Dames and I were announced as chief executive and chairman respectively by the Cabinet of our Republic. We – Brian, the executive team, the board and I – continue to be resolute in ensuring that the confidence and honour bestowed upon us are not misplaced, especially in this phase that is indeed one of the most challenging, yet exciting periods of Eskom’s history.

At Eskom, we are all acutely aware of its developmental impact, the significance of the utility’s performance in terms of the wellbeing of all South Africans as well as southern African societies. We understand that our competitiveness as a nation – ultimately, our most important variable in creating sustainable jobs, exports and growth – greatly depends on the availability and pricing of electricity.

Our economy is resource-based and equally, our 21st century civilisation is dependent on a reliable supply of electricity. The quality of life of all our people, too, dramatically depends on the availability of electricity, and on the environmental conditions in which we all live. Therefore, the implications of what we do are never far from our minds.

This report then seeks to provide all interested stakeholders, both in South Africa and internationally, with a broad overview of what we do, why and how we do it and the choices we face. It is broader than most annual financial statements, since we believe that there is deep interest in our performance, our plans, our progress – and our approach to the significant challenges that both South Africa and Eskom face in terms of generating power, distributing it, costing it, and facing the environmental impact of our activities and choices. I would like to position the various elements of this report by introducing three major themes below.

Eskom – the organisation

We have re-tooled the leadership and managerial infrastructure, our capital expenditure funding plans and tariff structures are in place, and we are looking to the future. Ahead of us lies a 12-year journey towards our centenary as well as a 19-year journey towards doubling South Africa’s electricity capacity. Between 2011 and 2030 we need to balance the demands of a complex build programme with security of supply.

Since the beginning of 2010, a number of new appointments have been made:

• Brian Dames assumed his role as chief executive on 1 July 2010
• Paul O’Flaherty assumed his role as finance director on 1 January 2010
• Dan Marokane was appointed chief officer (Group Commercial) on 1 September 2010
• Bhabhalazi Bulunga was appointed as divisional executive (Human Resources) on 1 February 2010
• Chose Choeu was appointed as divisional executive (Corporate Affairs) on 1 June 2010.

We have embarked on a review of our entire strategy to reflect the changing outlook for Eskom. Eighteen months ago, we were experiencing the after-effects of rotational load shedding in 2008 as an emergency response, we had no financially sustainable plan, we were six months away from the daunting challenges of the 2010 FIFA World Cup™ – and we were in danger of doubting our own abilities and capabilities. The strategy reflected these immediate challenges, but our outlook now needs to be based on our longer-term challenges of balancing supply and demand, and the environmental challenges ahead. Our new strategy plans to address this shift in organisational focus from “surviving the crisis” to “providing for the future”.

Under the leadership of our chief executive, we have taken this new thinking on the road. We engaged with more than 10 000 of our 41 778 employees to discuss our preparations for the 2010 FIFA World Cup™, our 2009/2010 results, introduced the new chief executive and talked about our new vision.

In support of Eskom’s commitment to HIV/Aids testing and counselling and, as part of these engagements, during March 2011 Eskom, together with one of its principal contractors, hosted an event at the Medupi power station construction site to promote HIV testing and counselling. The event was graced by the Deputy President of our Republic, Mr KP Motlanthe, the Minister of Health, Dr PA Motsoaledi and the Minister of Public Enterprises, Mr MKN Gigaba. The Deputy President, together with both ministers addressed the employees regarding the importance of HIV prevention and the National HIV Counselling and Testing Campaign. In response more than 2 000 employees – representing almost 70% of the employees on the site – reported for voluntary HIV testing, while more than 1 800 employees underwent screening for tuberculosis. The Eskom board and executive committee are dedicated to strengthening the organisation through such ongoing open communication and investments in people, processes and technology.

This re-tooling of the managerial process, as we see it, has been an essential step in preparing us for the new phase we have entered in Eskom’s rich history. A short review of our recent performance – elaborated on in this report – reflects the momentous nature of the previous year.

Central to everything we do, we need to engage with relevant stakeholders across the spectrum of all our activities. Therefore, we have embarked on deep and meaningful connections with organised business and organised labour in each of the nine provinces, and other important stakeholders.

Government established an inter-ministerial committee (IMC) in 2009 to consider matters related to Eskom’s second multi-year price determination (MYPD 2). We have worked intensively with the IMC since its inception and have supported all the key outcomes of the various working groups.

 

Our strategic objectives are aimed at meeting our stakeholder expectations and providing the necessary electricity infrastructure to support growth. We understand that our reputation is critical to achieving these strategic objectives, which is why it is pleasing to note the steady improvement in our reputation. Each year we measure our reputation through the globally recognised RepTrak™ score as measured through the Reputation Institute’s RepTrak™ process. We will continue to prioritise all efforts to improve our reputation including the implementation of an internal reputation training programme for all our employees. We recognise that our employees are the guardians of Eskom’s reputation and are the ones who will deliver on our promises and meet stakeholders’ expectations through continuously improved engagements.

Our reputation score improved steadily over the past three years. Our current RepTrak™ Pulse is 54.4 points, up 12.1 points from last year and 13.9 points from 2008/9.