Eskom Holdings Ltd.'s Recovery Plan Project

Recovery Plan Project
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Recovery Plan Project
Overview
Eskom Holdings Ltd. is a vertically integrated South African company that is fully owned by the South African government. The main activity of the company is the generation, transmission, and distribution of electricity to commercial, industrial, agricultural, mining, and residential users in the country and other South African Development Community (SADC) countries. In addition, the company purchases electricity from other SADC countries for domestic use.
In the article, “Project Risk Management Practice: The Case of a South African Utility Company,” van Wyk, Bowen, and Akintoye (2008) review the risk management practices that have been established for Eskom’s Recovery plan project that takes effect following power interruptions caused by supply shortfall or increased customers’ demand. To this end, the authors review the content and context of Eskom’s risk management practice at division and project levels. Notably, Eskom has detailed the roles that various stakeholders within the company should embody in the risk management process and invested significant resources to facilitate the process. Despite the investment, Wyk, Bowen, and Akintoye (2008) observe that the risk management tools employed at the company are simple.
The present paper will review Eskom’s Recovery Plan project as analyzed by Wyk, Bowen, and Akintoye (2008) with a specific focus on risk identification, the assessment and prioritization of risk, the response to risk prevention, the mitigation of contingent actions, and the conceptual steps used to respond to project risk. To this end, the paper will review the Western Cape Recovery Project Plan as detailed by Wyk, Bowen, and Akintoye (2008). In the analyses, the inherent risk shall be identified and categorized and the potential response strategies discussed. Further, the strength and weaknesses of the project risk management practices shall be identified.
The Fundamental Conceptual Steps Used to Respond to Project Risks
Notably, four conceptual steps are used to respond to project risks at Eskom. In the first step, the stakeholders involved in the risk management process (RMP) ensure that the risk inherent to the project are identified so that they can be effectively managed. The risk identification team at Eskom is made up of representatives from all the functional departments within the organization to ensure that all the inherent risks that are likely to occur in the various functional areas are identified. Second, Eskom focuses on the analysis of the identified risks. To this end, the Recovery Project teams assess the identified risks to establish the magnitude of the risk. Notably, the company relies largely on the experience of the risk management team to assess the severity of the identified risks.
Third, the potential response to the identified risks is formulated to minimize the severity of the risk or eliminate it. For a utility company such as Eskom, the nature of the response to the risk depends on its significance and influence on the company. The company has a guiding risk response nomenclature used by the Project Rec...