Clarification Meeting: Provision of Financial Advisory Services (Panel) For a Period of Three Years on an As and When Required Basis - Corp 5142 Venue – Online (Microsoft Teams Meeting) Date: 22 July 2020
Questions & Answers: SCOPE FOR PANEL C (REGULATORY ADVISORY SERVICES) 1. Advisory services on industry restructuring and financial aspects of divisionalisation and unbundl ing. 2. Financial Risk Management - Advisory on credit risk solutions and credit risk appraisals, advice and assistance with analysis of credit rating impact of economic regulation environment and potential implications of regulatory decisions and methodologies for creditworthiness/credit risk ratings, also in the context of comparator SOEs’ ratings and their key credit metrics. 3. Financial and Operational Benchmarking of the main elements of Eskom’s performance against other peer companies i.e. revenues, costs, stand-alone credit rating profile, Overnight cost of construction, Levelised cost of energy, etc. 2
Questions & Answers: SCOPE FOR PANEL C (REGULATORY ADVISORY SERVICES) 4. Review of mine specific plans and operations to determine profitability and viability of mining operations, determining whether there is a case for hardship, review of underlying income statement, balance sheet and cash flow statements and models; advice regarding mining economic factors, mining regulation, mining inflation, environmental rehabilitation trusts, investment options for mine rehabilitation trusts, limitation of environmental rehabilitation liabilities; Analysis and review of life of mine plans and specific capital investment reviews, analysis of mine specific models e.g. Xerus/Xpac; 5. Modelling, modelling support, model maintenance, and support with calculations of Long Run Marginal Costs, Short Run Marginal Costs, Time Of Use costing, Ancillary Services costing, and related specialised energy costing analysis; 6. Cost to serve analysis – The consultant would need to use the international methodology that is used to calculate the cost of supplying a specific customer or group of customers. The consultant needs to take into account the demand and usage profile of the specified customer/s; 3
Questions & Answers: SCOPE FOR PANEL C (REGULATORY ADVISORY SERVICES) 7. Advice and assistance regarding economic regulation frameworks, methodologies, due process etc, especially in the context of industry unbundling and restructuring, including specialist issues such as Regulatory Asset Base, Regulatory Rate of Return, including support with regard to and during NERSA’s stakeholder workshops, public hearings and other engagements regarding the revision of the MYPD Methodology, revenue applications etc, as well as support on engagements with other entities on these matters; 8. Advice regarding Electricity Supply Industry market structures and electricity pricing / tariff models in the new era of high penetration of REs and off-grid and distributed generation etc. (including (a) product definition and unbundling of all products and tariffs offered by the ESI; (b) pricing / tariff models, rate design (c) internal transfer pricing aligned to such ‘product / tariff unbundling’ in the preparation to further functional / organisational unbundling. 9. Economic impact analysis/assessment of electricity prices and price changes, including assessment of price elasticity effects, Cost of Unserved Energy, Cost of Load Shedding, and related matters. 4
Questions & Answers: Functionality Evaluation Criteria -- PANEL C (REGULATORY ADVISORY SERVICES) The Bidder may only proceed to the next phase of the evaluation for this scope of the panel if a minimum total score of 70% has been obtained. 5
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