Civil works at Upington Substation. Commercial Presentation Date: 19 October 2015 Presenter: Ngiphile Nkwanyana Ref: PS(PDP)/2015/NN/07

AGENDA 3. Commercial Requirements 1.Opening and Welcome TST Change Management Toolkit 5. SHEQ Requirements 4. SD&L Requirements 8. Closure 6. Engineering Requirements 2. Evacuation Route 7. Project Requirements

2016/07/083 Information on the Eskom Tender Bulletin Commercial Documents : NEC3 Invitation To Tender Technical Documents : Technical Returnables List of Designs Drawings Health & Safety : H&S returnable checklist Environmental : Environmental specs and returnable checklist Quality : Quality specs and returnable checklist Supplier Development & Localisation) SD&L : B-BBEE - Evaluation Scoring Matrix : Localization Matrix Pricing Schedule/BOQ - See addendums for revised SHEQ Specification & SD&L Matrix

2016/07/084 Tender Data The Employer is Eskom Holdings SOC Limited The Eskom Representative is: Ngiphile Nkwanyana (Ms) Address: Megawatt Park Tel: Fax: – South Africa Only All queries and communication must be directed through to the buyer : preference is on The tender shall be for the whole of the contract.

2016/07/085 Tender Data Closing date of RFP :10h00 am on the 29 October 2015 Tender Number : PS(PDP)/2015/NN/07 Place for delivery of tender: Tender office at Megawatt Park Tender validity: 26 weeks Clarifications will be received up to 5 working days prior to tender closing date The tender shall be submitted as an: Original hard copy One (1) hard copies plus One (1) soft copy Please separate the files as follows: File 1 - Commercial and Financial File 2 - Technical File 3 - Health and Safety File 4 - Quality File 5 - Environmental.

Tender Data Continues…  The tender shall be for the whole of the contract  Site visit is not compulsory : Contractors who fail to attend this meeting shall not be disqualified from the tender process.  Right to Negotiate : Eskom reserves the right to enter into mandated negotiations with anyone or more selected tenderers in accordance with Eskom’s approved policies and procedures  Evaluation : The tender evaluation process will be based on evaluating the overall value to Eskom rather than the tendered prices only and Eskom will not necessarily award the contract to the tenderer with the lowest price or the highest score  It is the responsibility of the contractor to look in the tender bulletin for any changes, updates, addendums, clarifications or additional information relating to this tender. 2016/07/086

Evaluation Criteria Evaluation Method A five step evaluation will be conducted as follows: 1, Basic Compliance 2. Functionality, 3. Financial Analysis 4. Price & preference 90/10) 5. Objective criteria on SD&L requirements & Financial Statement Analysis. Step 1 Basic Compliance CIDB grading 7CE and above --- As part of the functionality evaluation, suppliers will be expected to meet the minimum threshold of 80% on both Engineering and SHEQ (combined) in order to be considered for further evaluation. Tenders which do not meet Eskom’s mandatory requirements will not be evaluated further 2016/07/087

Evaluation Criteria Functionality Criteria Weight Tenderers will be expected to score at least the minimum overall threshold to proceed to the next phase Engineering 40% 75% Safety & Health and Environment 30% all or nothing Quality 30% all or nothing 2016/07/088 Step 2 – Functionality All tenderers will be evaluated on the basis of functionality as a criterion. The criteria are as below: Tenders which do not meet Eskom’s technical requirements will not be evaluated further

Evaluation Criteria Step 3 – Financial Analysis  An analysis of the tenderers financial statements will be conducted for the purposes of establishing the tenderers financial viability and ability to meet all of its contractual obligations for the duration of the contract, should the tenderer be awarded the contract.  Where applicable a financial evaluation will be conducted by Eskom to further evaluate the financial viability of the tenderer. (incl. formal treasury evaluation) 2016/07/089

Evaluation Criteria Step 4 – Price and Preference Price Evaluation (90 points) 2016/07/0810 Adjudication CriteriaPoints Price Evaluation Ps = 90 (1 – Pt – Pmin ) Pmin 90 B-BBEE Evaluation (10 points)

Evaluation Criteria Step 5 - Objective Criteria Suppliers are required to achieve a minimum threshold of 60% on the SD&L Compliance matrix.. The matrix will be evaluated to give an overall score for each supplier. See the Matrix attached 2016/07/0811 TABLE 1: SUPPLIER DEVELOPMENT AND LOCALISATION COMPLIANCE MATRIX FOR SUPPLIERS AND CONTRACTORS CriteriaWeight (%)Total Target (%) Proposed Target (%) Total Overall Weighted Score Local Content to South Africa 15.00% % 0.00% Local Content Local to Site 20.00% 40.00% Procurement from LBS 10.00% 0.00% Procurement from BWO 15.00% 0.00% Procurement from BYO/SBE/BPLwD 15.00% 8.00% 0.00% Skills Development 25.00% 0.00% Total Score100.00% Total Supplier Development and Localisation Score0.00% TABLE 2: SKILLS DEVELOPMENT COMPLIANCE MATRIX Skill Type (Occupation)OFO Occupational GroupWeight (%) Target Number of Persons to be Trained (Local to South Africa) Proposed Number of Persons to be Trained (Local to South Africa) Target Number of Persons to be Trained (Local to Site) Proposed Number of Persons to be Trained (Local to Site) Total Weighted Score Foundation Team Leaders 15.00% % Re-enforcing practitioners 15.00% % Earthworks practitioners 10.00% % Bricklayers 10.00% % Safety practitioners 15.00% % Shutter Hands 15.00% 22 Drainage Pipe Layers 20.00% 44 Total100.00% %

Addendums T1.2 Tender Data Clause 2.1 states “CIDB level or grading required for this tender” and Clause T2 1b for the BOQ reads as follows: 2016/07/0812 Originally statesReplaced with Where the tender calls for construction works, the following CIDB registration grading level is required (irrespective if the tenderer is a single entity or a JV- Joint Venture): The Supplier will be required to have appropriate CIDB grading in line with the tender. Where the tender calls for construction works, the following CIDB registration grading level is required (irrespective if the tenderer is a single entity or a JV- Joint Venture): The Supplier will be required to have appropriate CIDB grading in line with the tender. CIDB grading 7CE PE and above. Initial old SHE specificationThe new SHE spec document was loaded. SD&L Matric- requested Skills development either 20 from S.A or 20 Local to Site (Upington)- See SD&L Matrix provided Suppliers are now requested to develop skills from Local to Site only.

Objective Criteria 13 In terms of the PPPFA, the application of objective criteria may be a valid and justifiable reason why a tender is not awarded to the highest scoring / highest ranked supplier, after application of the 90:10 preference points system. Objective criteria will generally be applied after evaluation, and are generally the criteria / conditions specifically linked to contract award (viz., legal compliance, adherence to contract terms and conditions, financial viability, specific goals, etc.), and may not necessarily be linked to the allocation of points for further scoring. In the interests of ensuring transparency all objective criteria must be clearly set out in the tender, with the associated returnable required for purposes of assessment / evaluation. Objective Criteria: It is anticipated that 100% of the contract value will be local to South Africa. Steel structures content associated with Substations and is 100% designated to for Local production and Suppliers are obligated to spend 100% locally to South Africa. Site visits will be done to verify and ensure compliance. Sound Financial Statement Analysis of a supplier being the ability for a supplier to carry out /execute a project of this magnitude(in terms of value). Threshold for Local Content = 100%. The full criteria is contained in the tender documentation

JV Requirements 30/06/1414 A JV agreement to spelling out:  All JV members including percentage shareholdingthe rights and obligations of each of the joint venture partners and their profit-sharing ratios  A written confirmation that the joint venture will operate as a single business entity for the duration of the contract  Details and confirmation of a single designated Bank account as set out in the JV agreement, as Eskom will pay the JV as a single entity into that bank account Tax certificate in the JV name or tax certificates of JV member companies or both B-BBEE certificate in the JV name issued by a verification agency that is SANAS or ABVA accredited. A full set of financial statements for each member of the JV company as indicated in the financial list A CIDB level for the JV (CIDB would combine levels of the member companies and issue a JV level).

Tender Returnable Documentation 15 Documents to be returned by the Tenderer comprise but is not limited to the following: T1.1 Acknowledgement Form T2.1a Commercial Returnable documents T2.1b Financial Returnable documents T2.1c Technical Returnable documents T2.1c SHEQ Returnable documents C1.1 Form of Offer and Acceptance C1.2 Data related to the contract conditions as provided by the Contractor/Consultant / Supplier C2 Description of tenderer’s specification for the works/services/goods PROPOSAL SUBMISSION: 2 FILES & 1 ELECTRONIC COPY FOR EACH COMMERCIAL(BOQ +FIN STATEMENTS& SD&L), TECHNICAL, SH,E&Q

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