Senior officials of Nepal Electricity Authority (NEA), the state-owned power utility, from now on will have to sign performance contract with the management, expressing commitment to achieve certain targets set by the NEA chief. The concept of performance contract, according NEA Managing Director Kulman Ghising, is being introduced to enhance the company’s efficiency.

The introduction of this provision—pushed by Energy Minister Janardan Sharma—means eight deputy managing directors, eight regional directors, project chiefs and more than 100 distribution centre chiefs will now have to sign the performance contracts.

The NEA MD, who is drafting the terms and conditions of the contract, says it will be ready within a month. “We are in the process of identifying key performance indicators on the basis of which the performance would be judged,” said Ghising.

If things go according to plan, all senior officials of the authority will have to start signing the contract within a month’s time.

“Once, this system is introduced, we will get right people in key positions,” Ghising said. “This will be very helpful in streamlining the operation of NEA which is very inefficient.”

The main target for the distribution centre chief, as per Ghising, would be to control electricity leakages. According to the recently published annual report of the authority, the leakage went up by 5.48 percent year-on-year in the last fiscal year.

“We are very serious about this and distribution chiefs will be allowed to use whatever resources at their disposals to control the leakages,” he said, adding, “Efficient management of inventory and raising the quality of services are other areas which require improvement.”

Likewise, regional directors will also get similar targets.

Similarly, NEA project chiefs will have to stick to the pre-determined work-schedule and their performance will be measured by their ability to complete the assigned tasks on time. Officials who fail to meet the target

mentioned in the performance contract will face stern action, including termination, according to Ghising.

 Although it is new for NEA officials to sign performance contract, the practice of inking such agreements is not new for a NEA MD.

The NEA MD has to sign performance contract with the Energy Ministry, and Ghising himself has signed such an agreement. If he fails to meet the target incorporated in the contract he could even be terminated from the job.

Previous NEA MD Mukesh Raj Kafle had to resign from the post after he failed to meet the targets included in the performance contract signed with the ministry. According to the performance contract signed between the ministry and Kafle, he had to score at least 50 percent during the annual evaluation. However, Kafle scored 45 and was asked by Minister Sharma to step down.