MEMORANDUM OF AGREEMENT - EE Publishers ... by Dr Sibusiso Sibisi in his capacity as Chief Executive Officer and he being duly authorised thereto (hereinafter referred to as “the

MEMORANDUM OF AGREEMENT

MADE AND ENTERED INTO BETWEEN

ESKOM HOLDINGS SOC LIMITED

Registration Number: 2002/015527/30

A public company established in terms of the Eskom

Conversion Act, 13 of 2001 herein represented by Mr Brian

Molefe in his capacity as Chief Executive and he being duly

authorized thereto

(hereinafter referred to as “Eskom”)

and

THE CSIR

The Council for Scientific and Industrial Research (CSIR), a

juristic entity established in terms of the Research Council

Act, 1988 as amended (Act No. 46 of 1988), herein

represented by Dr Sibusiso Sibisi in his capacity as Chief

Executive Officer and he being duly authorised thereto

(hereinafter referred to as “the CSIR”)

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PREAMBLE

WHEREAS:

• the objects of the CSIR are, through directed and particularly multi-disciplinary

research and technological innovation, to foster, in the national interest and in

fields which in its opinion should receive preference, industrial and scientific

development, either by itself or in co-operation with principals from the private

or public sectors, and thereby to contribute to the improvement of the quality

of life of the people of the Republic, and to perform any other functions that

may be assigned to the CSIR by or under the Scientific Research Council Act

46 of 1988, as amended by Act 71 of 1990.

• Eskom’s mandate is to provide electricity in an efficient and sustainable

manner, including its generation, transmission, and distribution and sales.

Eskom is a critical and strategic contributor to the South African government’s

goal of security of electricity supply in the country as well as economic growth

and prosperity.

• THE PARTIES, recognizing the synergy between them, concluded a

Memorandum of Agreement (MoA) on 22 October 2010 to collaborate in

areas of mutual interest.

• Being desirous of continuing this collaboration THE PARTIES wish to

conclude a new Memorandum of Agreement (MoA) that will further formalize

their collaborative relationship and, accordingly, this agreement provides for:

o collaboration to establish a long term relationship to perform scientific

and operational research and evaluation tasks and provide scientific

decision support in support of Eskom’s strategic and operational

needs;

o an INSTITUITIONAL FRAMEWORK for co-operation between the

PARTIES which aims at aligning and enhancing interaction between

them in support of national goals;

o the identification of initiatives or programmes of a strategic nature

where the Parties deem appropriate; and

o the initial context within which the co-operation between the Parties will

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take place.

NOW THEREFORE THE PARTIES HEREBY AGREE AS FOLLOWS:

1. PREAMBLE

The Preamble shall form an integral part of the AGREEMENT between THE

PARTIES for purposes of any interpretation of the AGREEMENT.

2. DEFINITIONS

In this agreement, unless the context clearly indicates otherwise, the following

words and/or phrases shall have the following meanings:

2.1. “AGREEMENT/THIS AGREEMENT” means this agreement and any/all

Annexure(s) attached thereto;

2.2. “ALTERNATE (PROXY)” means a temporary representative appointed

through a written delegation with full rights of representation and

decision making;

2.3. "BILATERAL PROGRAMMES" means such collections of related

BILATERAL PROJECTS and activities or NATIONAL PROGRAMMES

in the FIELD as may be identified and approved by the STEERING

COMMITTEE from time to time, and for which programmes the

PARTIES will follow due process to secure the necessary approval and

funding to execute the various programmes, projects and activities;

2.4. "BILATERAL PROJECTS" means such projects in the FIELD as may

be identified and approved by the STEERING COMMITTEE from time

to time, and for which projects Eskom and the CSIR have agreed to

fund and thus secured the necessary funding on the basis that

agreements for BILATERAL PROJECTS will be concluded between

the PARTIES in writing on an individual project basis and as such,

funding contributions will vary;

2.5. “COLLABORATION” means the collaboration between the PARTIES

under THIS AGREEMENT, and any BILATERAL PROGRAMMES,

BILATERAL PROJECTS and related activities;

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2.6. “CONFIDENTIAL INFORMATION” means information that (a) relates

to the DISCLOSINGS PARTY’S past, present or future research,

development, business activities, products, services and technical

knowledge, relating to THIS AGREEMENT, and (b) either has been

identified in writing as confidential. (As used herein, the PARTY

disclosing CONFIDENTIAL INFORMATION is referred to as the

DISLCOSING PARTY and the PARTY receiving the CONFIDENTIAL

INFORMATION is referred to as the RECIPIENT or the RECEIVING

PARTY);

2.7. “EFFECTIVE DATE" shall notwithstanding the date of signature of THE

AGREEMENT by THE PARTIES, mean 1st May 2016;

2.8. “EXPLOITATION" means the utilisation of INTELLECTUAL

PROPERTY rights arising from THIS AGREEMENT, by putting the

same to commercial use/implementation with the view to making profit.

2.9. “FUNDS” means such monies as may, from time to time, be approved

by Eskom and the CSIR for BILATERAL PROJECTS and BILATERAL

PROGRAMMES under the INSTITUTIONAL FRAMEWORK and in line

with the provisions of the Public Finance Management Act, Acts No 1

and 29 of 1999 as well as the Treasury Regulations issues thereunder

from time to time;

2.10. “INSTITUTIONAL FRAMEWORK” means the CSIR/Eskom

INSTITUTIONAL FRAMEWORK FOR CO-OPERATION attached

hereto and marked Annexure “A”;

2.11. “INTELLECTUAL PROPERTY” means any and all technical or

commercial information, including, but not limited to the following:

chemical structures; biological or chemical information; manufacturing

technique and designs; specifications and formulae; data, systems and

processes; production methods; trade secrets; financial and marketing

information; patents, trademarks, designs, inventions, know-how and

copyright, including but not limited to, copyright in documentation (text)

or computer/software programmes relating to BILATERAL PROJECTS

or BILATERAL PROGRAMMES.

2.12. "PARTIES" shall mean the CSIR and Eskom respectively;

2.13. "PROGRAMME CO-ORDINATORS" means the persons jointly

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appointed by both Eskom and the CSIR for purposes of coordinating

any specific BILATERAL PROGRAMME;

2.14. "PROGRAMME MANAGEMENT COMMITTEE" shall mean the

COMMITTEE of CSIR and Eskom representatives appointed by the

STEERING COMMITTEE who shall be responsible for the

management and reporting on of the BILATERAL PROJECTS to the

STEERING COMMITTEE and will discuss and select potential

BILATERAL PROJECTS in the FIELD to be considered by the

STEERING COMMITTEE;

2.15. "PROJECT CO-ORDINATORS" shall mean the persons jointly

appointed by both Eskom and the CSIR for purposes of coordinating

any specific BILATERAL PROJECT;

2.16. "STEERING/BILATERAL COMMITTEE" shall mean the COMMITTEE

as established under Clause 5 below;

2.17. “NATIONAL PROGRAMMES” shall mean such programmes or

collections of related activities in the FIELD done in collaboration with a

third party or parties as may be identified and approved by the

STEERING COMMITTEE from time to time, and for which programmes

the PARTIES will follow due process to secure the necessary approval

and funding to execute the various programmes, projects and activities

in collaboration with the third party or parties.

3. STATUS AND DURATION OF THE AGREEMENT

3.1. THE AGREEMENT shall operate as from the EFFECTIVE DATE and

shall remain in force for a period of five years, or until the date of

finalisation of all BILATERAL PROGRAMMES/PROJECTS(Whichever

occurs later in time) or as otherwise agreed between THE PARTIES in

writing.

3.2. Eskom and CSIR shall, annually, within sixty days of the anniversary

date of the EFFECTIVE DATE or when circumstances affecting THE

AGREEMENT change, review THE AGREEMENT, provided that the

PARTIES shall put in writing any such changes into writing which will

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require signatures of both PARTIES and allow one another a

reasonable time for the implementation of any agreed changes.

3.3. THIS AGREEMENT replaces, cancels and supersedes the

Memorandum of Agreement signed on 22 October 2010, save to the

extent that:

3.3.1 the PARTIES hereby ratify whatever was done thereunder so as

to successfully conclude approved BILATERAL

PROJECTS/PROGRAMMES with timelines that extend beyond

the cancellation of the existing Memorandum of Agreement;

3.3.2 any CONFIDENTIAL INFORMATION shared thereunder shall be

deemed to constitute CONFIDENTIAL INFORMATION shared

hereunder;

3.3.3 The existing NEC3 Professional Services Contract (Contract No:

4600048155) between the PARTIES remains in force until it

expires or is replaced by a new NEC3 Professional Services

Contract.

4. RESPONSIBILITES OF THE PARTIES

4.1. The FUNDS shall be made available by the PARTIES as agreed to in

separate BILATERAL PROJECT/PROGRAMME specific agreements

and pursuant to the appropriate funding model.

4.2. The PARTIES shall appoint PROJECT/PROGRAMME CO-

ORDINATORS in respect of BILATERAL PROJECTS/PROGRAMMES.

4.3. Both PARTIES shall comply with the provisions of THIS AGREEMENT,

the Public Finance Management Act, (Act 1 of 1999), the National

Treasury Regulations and Directives issued in terms of the PFMA Act

and the Preferential Procurement Policy Framework Act, (Act 5 of

2000) and the regulations and directives issued in terms thereof.

4.4. Both PARTIES shall disclose to the other any other source of funding

and/or income (including donor funding) specifically related to

BILATERAL PROJECTS/PROGRAMMES performed under THE

AGREEMENT.

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5. INSTITUTIONAL AND MANAGERIAL ARRANGEMENTS

5.1. A STEERING COMMITTEE will be constituted, which will consist of the

following representatives.

5.1.1. At least Six(6) permanent members:

5.1.1.1. At least Three(3) Executive Directors of the CSIR,

as appointed by it;

5.1.1.2. At least Three(3) Executive representatives of

Eskom as appointed by it.

5.1.2. Other representatives:

5.1.2.1. Other representatives may be appointed from THE

PARTIES or other institutions and shall be co-

opted to the STEERING COMMITTEE as and

when the need arises.

5.2. The STEERING COMMITTEE will have the following functions:

5.2.1. To evaluate and direct the progress of THE PARTIES with

respect to fulfilling the objectives of THIS AGREEMENT.

5.2.2. To appoint a PROGRAMME MANAGEMENT COMMITTEE

to manage the BILATERAL PROJECTS/PROGRAMMES as

identified in the INSTITUTIONAL FRAMEWORK.

5.2.3. To provide strategic direction to the PROGRAMME

MANAGEMENT COMMITTEE regarding the technology

base and the definition and prioritization of the BILATERAL

PROJECTS/PROGRAMMES.

5.2.4. To evaluate and approve proposals from the PROGRAMME

MANAGEMENT COMMITTEE for adjustment, expansion or

additions to the defined BILATERAL

PROJECTS/PROGRAMMES.

5.2.5. To review THIS AGREEMENT and make recommendations

in alignment with the objectives of the INSTITUTIONAL

FRAMEWORK;

5.2.6. To appoint sub-committees as and when the need arises;

5.2.7. To approve and certify as correct the minutes of previous

STEERING COMMITTEE meetings;

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5.2.8. To review, approve and formulate terms and conditions for

commercial exploitation of INTELLECTUAL PROPERTY

developed in the course of projects performed under the

BILATERAL PROJECTS/PROGRAMMES.

5.2.9. To do whatever else may be necessary in order to give full

and proper effect to the objectives of THIS AGREEMENT,

including, but not limited, to the consideration and approval

of sub-contracting with third parties on NATIONAL

PROGRAMMES.

5.3. The STEERING COMMITTEE will operate as follows:

5.3.1. The STEERING COMMITTEE will meet at least once every

quarter.

5.3.2. Decisions taken by the STEERING COMMITTEE shall be on

a consensus basis.

5.3.3. Chairmanship of the STEERING COMMITTEE shall rotate

between Eskom and the CSIR on a meeting by meeting

basis.

5.3.4. The PARTY chairing a specific meeting of the STEERING

COMMITTEE shall convene the meeting, prepare the

agenda in consultation with the other PARTY, and ensure

that minutes, reflecting key decisions, are kept and

distributed to the individual representatives of the

STEERING COMMITTEE within a reasonable time following

every such meeting.

5.3.5. There shall be no quorum at any STEERING COMMITTEE

meeting, unless at least Two(2) representatives from the

CSIR and Two(2) representatives from Eskom are present at

such a meeting.

5.3.6. THE PARTIES have the discretion to increase or reduce the

number of representatives by a written agreement between

them.

5.3.7. Both Parties may make recommendations to the STEERING

COMMITTEE relating to the BILATERAL

PROJECTS/PROGRAMMES, including, but not limited to

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recommendations pertaining to the need for the

establishment of new BILATERAL

PROJECTS/PROGRAMMES.

5.3.8. Each PARTY has the right to remove and replace its

permanent members on the STEERING COMMITTEE at any

time on written notice to the other parties.

5.3.9. In the event of the absence of an executive representative,

such representative must be represented by an

ALTERNATE(PROXY).

5.4. The PROGRAMME MANAGEMENT COMMITTEE as appointed by the

STEERING COMMITTEE shall have the following functions:

5.4.1. To prioritize the BILATERAL PROJECTS/PROGRAMMES

and their activities.

5.4.2. To identify potential BILATERAL

PROJECTS/PROGRAMMES and make recommendations to

the STEERING COMMITTEE for inclusion of these

BILATERAL PROJECTS/PROGRAMMES in the

INSTITUTIONAL FRAMEWORK.

5.4.3. To allocate and manage the funds within the portfolio of

BILATERAL PROJECTS/PROGRAMMES and within the

BILATERAL PROJECTS/PROGRAMMES, the tasks and

activities.

5.4.4. To approve work authorisations for the initiation of projects,

tasks and activities within the portfolio of BILATERAL

PROJECTS/PROGRAMMES.

5.4.5. To make recommendations to the STEERING COMMITTEE

for the establishment of NATIONAL PROGRAMMES and

BILATERAL PROGRAMMES/PROJECTS and the allocation

of funds to the various portfolios of programmes.

5.4.6. To manage the portfolio of BILATERAL

PROJECTS/PROGRAMMES on a continuous basis

5.4.7. To approve PROJECT/PROGRAMME CO-ORDINATORS in

respect of BILATERAL PROJECTS/PROGRAMMES.

5.5. PROGRAMME MANAGEMENT COMMITTEE will operate as following:

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5.5.1. The PROGRAMME MANAGEMENT COMMITTEE will

consist of a minimum of six (6) senior management

representatives, three (3) from the CSIR and three (3) from

the Eskom who shall be responsible for the management of

the BILATERAL PROJECTS/PROGRAMMES on a

continuous basis.

5.5.2. Other representatives may be appointed from THE PARTIES

or other institutions and shall be co-opted to the

PROGRAMME MANAGEMENT COMMITTEE as and when

the need arises.

5.5.3. The PROGRAMME MANAGEMENT COMMITTEE will meet

at least every two months or more frequent as mutually

agreed to.

5.5.4. The CSIR shall chair the first PROGRAMME

MANAGEMENT COMMITTEE meeting while Eskom shall

chair the next, where after chairmanship of all subsequent

PROGRAMME MANAGEMENT COMMITTEE meetings

shall alternate between the PARTIES.

5.5.5. A quorum for a PROGRAMME MANAGEMENT

COMMITTEE meeting shall be constituted by at least two (2)

representatives from the CSIR and two (2) representatives

from Eskom.

5.5.6. Decisions taken by the PROGRAMME MANAGEMENT

COMMITTEE shall be on a consensus basis.

5.5.7. The PROGRAMME MANAGEMENT COMMITTEE shall

determine the proposed time, place and modus operandi of

subsequent meeting(s). The CSIR shall provide the

secretariat function for the meeting.

5.5.8. THE PARTIES shall ensure that minutes, reflecting all

decisions, are kept and distributed to the individual

representatives of the PROGRAMME MANAGEMENT

COMMITTEE within fourteen (14) calendar days following

every such meeting.

5.5.9. Each PARTY has the right to remove and replace its

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representatives on the PROGRAMME MANAGEMENT

COMMITTEE at any time on fourteen (14) calendar days

written notice to the other PARTY.

5.5.10. In the event of the absence of a representative with

permanent member status, such representative must be

represented by an ALTERNATE (PROXY)

5.5.11. THE PARTIES have the discretion to increase or reduce the

number of representatives by a written agreement between

them.

6. BREACH AND TERMINATION

6.1. In the event of any of THE PARTIES committing a material breach of

any of the terms and conditions of THE AGREEMENT, and remaining

in default for a period of fourteen (14) days after receipt by it of written

notice from the other party calling for such breach to be remedied, the

party delivering such notice shall be entitled, without prejudice to any

other rights it may have in terms of THE AGREEMENT or in law, to

terminate THE AGREEMENT by written notice to that effect given to

the other party.

6.2. The AGREEMENT may at any time be terminated by mutual written

consent between THE PARTIES.

6.3. Termination of THE AGREEMENT for whatever reason shall not

absolve THE PARTIES from the obligation to observe the

confidentiality measures and other restraints as set out herein.

7. CONFIDENTIALITY

7.1. The RECEIVING PARTY undertakes to ensure that all

CONFIDENTIAL INFORMATION of the DISCLOSING PARTY is kept

secure and strictly confidential and that only persons on a need to

know basis shall have access to such CONFIDENTIAL

INFORMATION.

7.2. The RECEIVING PARTY shall not disclose, without the prior written

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consent of the DISCLOSING PARTY, and of the CONFIDENTIAL

INFORMATION of the DISCLOSING PARTY including, without

limitation, any information relating to the BILATERAL PROJECTS, or

the agendas/minutes of STEERING COMMITTEE or PROGRAMME

MANAGEMENT COMMITTEE meeting and INTELLECTUAL

PROPERTY of the DISCLOSING PARTY, to any unauthorised third

party.

7.3. The obligations of the RECEIVING PARTY pursuant to the provisions

of THIS AGREEMENT shall not apply to any CONFIDENTIAL

INFORMATION that:

7.3.1. is known to, or in possession of the RECEIVING PARTY prior

to disclosure thereof by the DISCLOSING PARTY;

7.3.2. is or becomes publicly known, otherwise than as a result of a

breach of THIS AGREEMENT by the RECEIVING PARTY;

7.3.3. is developed independently of the DISCLOSING PARTY by

the RECEIVING PARTY in circumstances that do not amount

to a breach of the provisions of THIS AGREEMENT;

7.3.4. is disclosed by the RECEIVING PARTY to satisfy an order of

a court of competent jurisdiction or to comply with the

provisions of any law or regulation in force from time to time;

provided that in these circumstances, the RECEIVING PARTY

shall advise the DISLCOSING PARTY to take whatever steps

it deems necessary to protect its interests in this regard and

provided further that the RECEIVING PARTY will disclose

only that portion of the CONFIDENTIAL INFORMATION

which it is legally required to disclose and the RECEIVING

PARTY will use its reasonable endeavours to protect the

confidentiality of such CONFIDENTIAL INFORMATION to the

greatest extent possible in the circumstances;

7.3.5. is disclosed to a third party pursuant to the prior written

authorisation and limited to the extent of such approval of the

DISCLOSING PARTY;

7.3.6. is received from a third party in circumstances that do not

result in a breach of the provisions of THIS AGREEMENT

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8. INTELLECTUAL PROPERTY

8.1. The ownership of any INTELLECTUAL PROPERTY (“BACKGROUND

INTELLECTUAL PROPERTY”) owned by either party prior to the

EFFECTIVE DATE of THIS AGREEMENT shall be and remain vested

with that party.

8.2. The ownership of and rights in and to any INTELLECTUAL

PROPERTY emanating from a BILATERAL PROJECT/PROGRAMME

(“FOREGROUND INTELLECTUAL PROPERTY”) shall be determined

in the BILATERAL PROJECT/PROGRAMME specific agreements, and

in full compliance with the provisions of the Intellectual Property Rights

from Publically Financed Research and Development Act(Act No. 51 of

2008).

9. GOVERNING LAW AND DISPUTE RESOLUTION

9.1. THIS AGREEMENT shall be governed by and construed in accordance

with the laws of the Republic of South Africa.

9.2. In the event of any dispute arising from THIS AGREEMENT, THE

PARTIES shall make every effort to settle such dispute amicably.

9.3. If the dispute is not capable of being settled between THE PARTIES

amicably, such dispute shall be elevated to the Senior Executives of

THE PARTIES or their duly designated representatives for mediation

purposes.

9.4. Should the dispute - despite such mediation - remain unresolved for a

period of 30 (thirty) days after being so referred, either party may

declare such dispute a formal intergovernmental dispute by notifying

the other party of such declaration in writing, in which event THE

PARTIES will follow the procedure as outlined in Section 42 of the

Intergovernmental Relations Framework Act, Act No 13 of 2005.

9.5. Should the dispute still remain unresolved, the dispute will be

adjudicated by a competent court with jurisdiction to hear the matter.

9.6. Notwithstanding the provisions of this clause, any party shall be entitled

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to institute any proceedings for urgent interim relief arising out of or in

connection with this agreement in the High Court of South Africa

having jurisdiction over THE PARTIES.

10. DOMICILIA AND NOTICES

10.1. THE PARTIES hereby choose domicilium citandi et executandi for all

purposes in terms hereof as follows:

10.1.1 The CSIR

Meiring Naude Road

Scientia, Pretoria

0002

For Attention: Francois Prinsloo

10.1.2 Eskom

Maxwell Drive

Sunnighill

Johannesburg

For Attention: Barry MacColl

10.2 Any PARTY shall be entitled to change its domicilium citandi et

executandi by giving written notice thereof to the other, provided that

such change shall not take effect until receipt by such other PARTY of

such notice.

10.3 All notices to be given by hand by THE PARTIES to each other in terms

hereof shall be given to the aforesaid addresses by delivery thereto, or

if by posting by prepaid registered mail, or by telefax to the following

addresses:

10.3.1 The CSIR

PO Box 395

Pretoria

0001

Facsimile No.: 012 841 3152.

For Attention: François Prinsloo

10.3.2. Eskom

Private Bag 41075

15

Cleveland

2022

Facsimile No: 086 665 6915

For Attention: Barry MacColl

10.4 In the event of such posting unless and until the contrary is proved, the

notice shall be deemed to have been received on the seventh day after

such posting.

10.5 In the event of faxing or hand delivered notices, the notice shall be

deemed to have been received on the date of faxing or delivery, unless

the contrary is proved.

11. PERFORMANCE

11.1 THE PARTIES shall do all acts and sign all such documents as may be

required from time to time in order to implement and carry out the terms

and conditions of THE AGREEMENT.

12. GENERAL

12.1 This document and the Annexures thereto contain the entire agreement

between THE PARTIES and neither party shall be bound by any

undertaking, representation or warranty not recorded herein or added

hereto as provided herein.

12.2. No alteration, variation, addition or agreed cancellation of THE

AGREEMENT shall be of any force or effect unless reduced to writing

as an addendum to THE AGREEMENT and signed by THE PARTIES

or their duly authorized signatories.

12.3 No failure or delay on the part of either party in exercising any right,

power or privilege hereunder shall operate as a waiver thereof, nor

shall any single or partial exercise of any right, power or privilege

preclude any other or further exercise thereof, or the exercise of any

other right, power or privilege. The rights and remedies herein

expressly provided are cumulative and not exclusive of any rights or

remedies, which THE PARTIES would otherwise have.

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12.4 The headings appearing in THE AGREEMENT have been used for

reference purposes only and shall not affect the interpretation of THE

AGREEMENT.

12.5 If any clause or term of THE AGREEMENT should be invalid,

unenforceable or illegal, then the remaining terms and provisions of

THE AGREEMENT shall be deemed to be severable therefrom and

shall continue in full force and effect unless such invalidity,

unenforceability or illegality goes to the root of THE AGREEMENT.

12.6 Both parties shall pay their own costs relating to the preparation and

settlement of THE AGREEMENT.

12.7 THE AGREEMENT shall be for the benefit of THE PARTIES and may

not be ceded or assigned in whole or in part by either party without the

prior consent of the other party, except that a party's interest shall be

assignable without the consent of the other in pursuance of any

merger, consolidation or reorganization or voluntary sale or transfer of

all or substantially all the assigning party's assets where the merged,

consolidated or reorganized corporation or entity resulting therefrom or

the transferee of such sale or transfer has the authority and power

effectively to perform that party's obligations to the other under THE

AGREEMENT.

12.8 Notwithstanding clause 12.7, Eskom may on written notice to the other

party, cede and delegate its rights and obligations under this

Agreement to any of its subsidiaries or any of the present divisions or

operations which may be converted into separate legal entities as a

result of the restructuring of the electricity supply industry and the

electricity distribution industry.

12.9 For the avoidance of doubt, the provisions of Clauses 6, 7, 8, 9, 10 and

12, shall survive termination of THE AGREEMENT.

12.10 Should there be any conflict between the terms and provisions of THE

AGREEMENT and any specific agreement on a BILATERAL

PROJECT, the terms and provisions of the latter shall prevail.

12.11 Should there be any conflict between the terms and provisions of THE

AGREEMENT and ANNEXURE A (attached hereto) the terms and

provisions of THE AGREEMENT shall prevail.

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SIGNED AT ……………….………. THIS ..…….. DAY OF …………………. 2016.

AS WITNESSES:

1. ………………………

2. ……………………… ………………………………………

for CSIR

SIGNED AT ………………………. THIS ……….. DAY OF …………………. 2016.

AS WITNESSES:

1. ………………………

2. ……………………… ……………………………………

for ESKOM

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ANNEXURE A

INSTITUTIONAL FRAMEWORK FOR COOPERATION BETWEEN

ESKOM AND THE CSIR

1. BASIS FOR COOPERATION

The Council for Scientific & Industrial Research (CSIR) and Eskom has a long

history of working together and delivering on important projects.

1.1. Short Term Interventions

To address its short term challenges Eskom has identified three imperatives that the

CSIR has mapped to identify new and existing technologies and capabilities that can

address specific challenges. The development of these new and existing

technologies and capabilities, but not limited to, can support Eskom’s current

operations by reducing costs and minimising losses:

• Availability of the existing fleet

o Extending transmission component lifetime through predictive

maintenance

o Advanced Fire Information System (AFIS) for real-time grid

monitoring to minimise transmission losses

o Laser-based refurbishment of high value components to reduce

maintenance and repair costs

o Development of joining technology & non-destructive testing centre

to improve build and maintenance quality

o Analytical testing to ensure environmental compliance

o Robotics for high risk maintenance

• Safely deliver on the new build programme & capacity management

o Development of joining technology & non-destructive testing centre

to improve build and maintenance quality

o Development of components for use in advanced high temperature

gas reactors and modelling of associated technologies

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o Reduction of water consumption

o Advance emission control technologies

o Load forecasting

o Smart energy management systems

• Regain financial strength

o Addressing security concerns and revenue loss

o Security risk management solutions to prevent theft and safeguard

high value assets

o Cable and infrastructure theft detection and prevention

o Smart meter protection

o Detection and prevention of illegal connections and revenue theft

1.2. Long Term Interventions

In the long term Eskom is also facing significant challenges from fundamental shifts

in the electricity and energy system that is becoming more distributed and flexible

due to the increasing contribution of renewables as well as the future focus on new

build. The former is a result of the distributed nature of renewables like solar photo-

voltaics and wind turbines to compensate for the vagaries of the weather as well as

the increase in “prosumers” i.e. customers that are not only consuming electricity but

producing it as well. In this regard the CSIR can assist Eskom in the following areas:

• Towards smarter decisions in energy

• Flexibility requirements in the future power system

• Implications of higher penetration of (fluctuating) renewables

• Establishing new build capabilities and capacity

• Integrated foresight studies and energy scenario planning incorporating

the impact of other sectors e.g. transport, mining,

2. STRATEGIC PARTNERSHIP

Eskom and the CSIR have therefore jointly approved the elevation of the current

partnership to a strategic partnership that can support both strategic decision making

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and assist with operational issues so as to address both the short- and long-term

challenges of Eskom and the country’s electricity system as summarized in Figure 1

below.

3. OBJECTIVES

To give full and proper effect to this strategic partnership the following objectives

have been agreed upon by Eskom and the CSIR:

• Common long-term vision and mission for the electricity system

o Being planned into each other’s strategy to participate in the

formulation process of the future electricity system

• Facilitate strategic, collaborative and contract research development and

implementation

o Improve the efficiency and sustainability of the electricity system

o Identify and address current and future needs and challenges

o Gain access to non-core expertise, complementary capabilities,

infrastructure and technology across the board

o Leverage investment and infrastructure, human capital development

and secondment, etc.,

Figure 1: Scope of the Eskom/CSIR strategic partnership

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o Joint strategic platforms linked to a portfolio of RDI projects

• Establish multi-sectoral national initiatives and programmes between

Eskom, Transnet, Denel, etc. to foster joint national strategic research and

development initiatives and capacity building

• Formulating innovative responses, plans, and technologies

To address these objectives the CSIR and Eskom have provided for:

• An institutional framework for co-operation that aims at aligning and

enhancing interaction between them in support of national goals

• Identification of initiatives or projects of a strategic nature

• Recognition of the synergy between CSIR and Eskom and the goal to

explore areas of collaboration that will enable the parties to fulfil their

respective mandates

4. ACTIONS

4.1. Governance

The CSIR is science council governed by a Board that is in turn governed by the

Scientific Research Council Act. The Board approves the strategy, goals, operating

policies and priorities for the organisation and monitors compliance with policies and

achievement. The key stakeholders for the CSIR are the Department of Science &

Technology and the dti.

Eskom is a state-owned company governed by a Board answering to the Minister of

Public Enterprises. The Board is responsible for the strategic direction of the

company and monitoring the company’s progress against the business strategy.

Both institutions are governed by the PFMA.

To manage and stimulate the strategic relationship between the CSIR and Eskom,

the governance structure as set out in Figure 2 will be instituted.

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The relationship between Eskom and the CSIR will be given strategic direction and

guided by the Steering Committee which will consist of permanent representatives

from Eskom and CSIR executive management as well as other representatives from

senior management appointed by the Steering Committee as and when the need

arises.

The management of the programmes and projects that make up this strategic

partnership will be managed by the Programme Management Committee (PMC).

This committee will be responsible for the presenting, and reporting on, of the

programmes and projects that make up this strategic relationship. The PMC will

consist of representatives from Eskom and the CSIR and other representatives

appointed by the PMC as and when the need arises. On the CSIR side, the

Programme Management Office (PMO) has been tasked by the CSIR Executive to

manage the programmes and projects and report on progress. The annual meeting

schedules are summarized below in Figure 3.

Figure 2: Strategic Partnership governance structure

(KAM – Key Account Managers)

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The numbers of attendees to ensure that decisions can be ratified at these meetings

are as given below in Figure 4.

The management of the projects and programmes will be the responsibility of

Coordinators/Project Managers approved by the PMC within the respective Eskom

and CSIR units and these Coordinators/Project Managers will report to the PMC on

the status of their projects.

4.2. Funding

Funding for programmes and projects will need to be approved by Eskom and/or

CSIR for projects that form part of this strategic partnership in line with the approvals

of the steering committee and the provisions of the Public Finance Management Act

(PFMA), Acts No 1 and 29 of 1999 as well as the Treasury Regulations issues

thereunder. Funding will be allocated by Eskom and the CSIR based on the following

contributions:

• Intellectual/inventive contribution

• Infrastructural contribution

• Benefit sharing

• Exploitation rights

Figure 3: Meeting schedules to ensure proper governance of the CSIR-Eskom relationship

Figure 4: Number of attendees for the required meetings. The numbers in brackets

represent the required quorum to ratify decisions while the X's represent the numbers

to be decided upon by the Steering Committee and Programme Managment Committee

respectively

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The parties will inform each other if third party funding is secured in addition to, or in

lieu of, either party’s contribution. Both parties will also campaign jointly to source

funding for flagship projects or National R&D initiatives from third parties such as the

government or funding agencies.

To facilitate the awarding of projects and programmes, Eskom will put in place an

annual Task Order of an agreed upon amount.

4.3. Human Capital Development

As a cornerstone of a shared Human Capital Development (HCD) strategy the CSIR

and Eskom will facilitate the following:

• The coordinated exchange of personnel between the organisations to improve

the collaborative partnership from the “bottom up”

o Gain experience in a different work environment e.g. R&D versus

implementation

o Improve dissemination of knowledge and new ideas

o Promote and facilitate interaction

o Foster coordinated research, development and implementation activities

o Build strong personal links between the organisations, thereby

strengthening long term cooperation and the development of new joint

programmes and projects

o Create an integrated network of excellence and build research capacity

through collaboration and knowledge-sharing between experts in multi-

disciplinary fields

• Development of joint training programs and the establishment of strategically

aligned Higher Education Institutions (HEIs) programs in consultation with the

HEIs

o Grow local Science, Engineering and Technical (SET) capabilities

o Enhance training activities for SET students to increase exposure to

R&D and industry domains

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o Increase training activities and support

o Create professional development opportunities through internships

and/or mentorships

4.4. Intellectual Property

The CSIR encourages the transfer of Intellectual Property (IP) that is of national

interest or to parties who can further develop and/or market it for economic and

social benefit, in accordance with the Intellectual Property Rights from Publicly

Financed Research and Development (IPR) Act, Act 51 of 2008 and the respective

parties Commercialisation Framework. This can occur through licensing or transfer

of the technology to an existing entity or a new venture creation. In the case of a

strategic partnership the sharing of jointly owned IP and the benefits that accrue from

owning the IP are based on:

• Intellectual/inventive contribution

• Financial contribution

• Infrastructural contribution

• Benefit sharing

• Exploitation rights

• Commercialisation agreement

In general, for all IP developed under the strategic partnership:

• The ownership of any background IP shall remain with the party that owned

the IP

• Ensuing foreground IP shall be deemed to be shared South African IP, with

due recognition of any proprietary background IP being provided to such

project.

• In identifying possible opportunities for commercial exploitation the explicit

approval of both parties shall be required for the use of jointly-owned IP, with

a view to extracting the most advantageous value proposition for South Africa

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• In cases where external funding is secured for the execution of a bilateral or

national project/programme, a specific agreement on the ownership and

control of applicable background and ensuing foreground IP shall be entered

into that shall be binding under South African as well as applicable

international law.