Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
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Overview of <strong>Multi</strong>-<strong>Year</strong> <strong>Price</strong> <strong>Determination</strong><br />
2013/14–2017/18 (MYPD 3)<br />
4.7 Benefits of price increases<br />
Page 94 of 144<br />
The money South Africa spends on electricity generates significant socioeconomic returns.<br />
<strong>Eskom</strong> is not just about megawatts; it plays a key role in developing local industry,<br />
broadening and deepening the country‟s skills pool, creating local jobs and transforming the<br />
economy through black economic empowerment. Its capacity expansion programme is a<br />
catalyst for economic growth and will leave a legacy for the country in terms of skills, local<br />
supplier industries and development, particularly in the communities where the projects are<br />
located.<br />
As a state-owned company, <strong>Eskom</strong> has a responsibility to promote social and economic<br />
development. <strong>Eskom</strong>‟s goal is to provide a reliable source of electricity in a way that helps<br />
uplift all South Africans, especially those who are the most economically vulnerable. Its<br />
ability to do so effectively hinges on its own financial health, which in turn is greatly<br />
influenced by the revenue it recovers from electricity sales.<br />
In addition to providing the electricity that allows South African companies and people to go<br />
about their business, <strong>Eskom</strong> contributes to South Africa‟s economy and development in a<br />
number of ways:<br />
Contribution to GDP – Through its sales of electricity, <strong>Eskom</strong>‟s economic value<br />
added at group level reached R54.9 billion in the financial year 2011/12. On a<br />
local level, expenditure on its capacity expansion programme contributed 95% to<br />
the gross regional domestic product of Lephalale (the town closest to where<br />
Medupi is being built), 27% to that of Delmas (near the new Kusile power plant)<br />
and 7% to that of Ladysmith (near Ingula hydro power plant).<br />
Local supplier development – <strong>Eskom</strong> has awarded R75.2 billion in contracts on<br />
its new build programme (63% of the total) to domestic suppliers, stimulating the<br />
expansion of local supplier industries.<br />
Employment – <strong>Eskom</strong> directly employs approximately 43 000 people, but there<br />
are over 130 000 people employed in the <strong>Eskom</strong> „cloud‟, through contractors,<br />
sub-contractors, suppliers and service providers, and over 500 000 people who<br />
are supported, directly or indirectly, by <strong>Eskom</strong>.<br />
Skills development – <strong>Eskom</strong> recruits and trains thousands of learners to<br />
increase South Africa‟s pool of skilled workers. Almost 12 000 engineers,