TERMS OF REFERENCE

Design and Implementation of a Monitoring Framework for NAWEC’s Performance Contract

I. Introduction and Context

Important steps have been taken over the last years to support the turnaround of the National Water and Electricity Company (NAWEC) of The Gambia into an efficient, credit- worthy, financially viable utility. NAWEC remains financially unviable, accruing around GMD500 million (around US$10 million, or 1 percent of GDP) in yearly losses, and is a major source of fiscal risk. Nevertheless, the energy sector roadmap (2017), NAWEC financial recovery plan (2018), and NAWEC Strategic Development Plan (SDP, 2018) cast a vision for NAWEC to achieve financial viability. Thanks to the implementation of the recommendations from these documents – supported by numerous World Bank financed programs[1] – NAWEC did not have to receive direct subsidies from the Ministry of Finance and Economic Affairs (MoFEA) in 2019.

Improved Corporate Governance at NAWEC is critical to solidify recent gains. As part of these efforts, MoFEA and NAWEC entered into a Performance Contract (PC) in 2019 and was effected in 2020^[2]. This was the first performance contract between NAWEC and MoFEA, and was part of the government’s broader effort to establish PCs with all State-Owned Enterprises (SOEs). The Key Performance Indicators (KPIs) included in the PC (see Annex) are a subset of the NAWEC Strategic Development Plan’s KPIs. The Directorate of Public-Private Partnerships and Public Enterprises (DPPP&PE) within the MoFEA has responsibility for the preparation and monitoring of SOE PCs. The Gambian Public Utilities Regulatory Authority (PURA), also plays a monitoring role.

Nevertheless, the implementation of the 2020 PC was not optimal. While the 2020 PC set out a monitoring framework, there was in effect very limited monitoring, driven by several factors (i) lack of current and reliable management of financial and operational information; (ii) little to no monitoring mechanism to track performance against KPIs, and allow for course correction through the year; as well as (iii) impacts from the COVID19 pandemic. A new PC for 2021-2023 is currently under preparation.

It is crucial to design a comprehensive performance monitoring mechanism to ensure an effective implementation of the 2021 PC. Establishing such monitoring mechanism will change the rationale from “what is happening?” to “why is this happening?” when assessing KPIs and seek responses and solutions from NAWEC. Therefore, The Gambia Electricity Restoration and Modernization Project (GERMP, financed by the World Bank), will finance a consultancy or consulting firm (“the Consultant”) to design and implement an effective performance monitoring mechanism and build capacity among DPPP&PE and PURA to perform this function.

II. Objective of the assignment

The Ministry of Finance and Economic Affairs (MoFEA) seeks a Consultant to fulfill the following two objectives over a period of one year: (i) design and implement a monitoring mechanism to assess the performance of NAWEC in relation to the Key Performance Indicators included in the 2021-2023 Performance Contract and (ii) build capacity among DPPP&PE and PURA to effectively implement the monitoring mechanism of NAWEC’s performance from year 2021.

III. Scope of the Services

The Consultant will implement the performance mechanism of the Performance Contract during the implementation of the 2021-23 Performance Contract, including building capacity of the DPP&PE unit to perform its monitoring duties.

Task 1: Design and implement a performance monitoring mechanism

The Consultant will:

NAWEC’s reporting to MoFEA, PURA and the Consultant

Develop reporting templates to be used by NAWEC while reporting to MoFEA, PURA and the Consultant on the performance of KPIs against contractual targets (monthly and annual reports).
Define a data collection mechanism to produce these reports. Such mechanism will specify the data to be collected for each KPI and their source. It will also indicate which data can be collected automatically through the Information Management System (IMS) currently being deployed within NAWEC (expected to go live in 2021). In addition, it will identify the units and staff in NAWEC responsible for collecting this data and establish collection periods/deadlines.
Produce a matrix summarizing key elements of the performance monitoring mechanism: reporting timeline, reports to be produced, data to be collected for each KPI, units/staff within NAWEC responsible for collecting the data and writing the reports.
Offer timely advise to MoFEA and NAWEC on the monitoring mechanism.

Monitoring of NAWEC and MoFEA performance by the Consultant

Monitor compliance by NAWEC and MoFEA with the commitments made under the PC.
Check the accuracy and validity of the information provided by NAWEC in its monthly, quarterly and annual reports, in particular that used in the calculation of the KPIs and verify the calculation of each performance indicator.
Assess the performance of each KPI, the causes of the differences observed between the results obtained and the contractual targets, and their consequences.
Calculate the Annual Global Indicator (AGI) and provide the details of the calculation.
Formulate recommendations likely to improve the performance of NAWEC and that of the sector, in particular on the corrective measures which should make it possible to close the gaps between the contractual targets and the results obtained or to revise and update the performance objectives.
Develop a plan for implementing the recommendations.

Task 2: Assess and build capacity of DPPP&PE and PURA’s staff to ensure performance monitoring

The Consultant will:

Capacity assessment

Identify departments and staff in the MoFEA DPPP&PE and PURA responsible for reviewing NAWEC’s reports (including technical and financial information) and assessing NAWEC’s performance against contractual KPIs targets.
Assess the capacity of identified DPPP&PE and PURA’s units/staff to critically review performance reports. This critical review implies being able to : (i) understand perfectly financial, commercial, technical and operational KPIs included in the PC ; (ii) assess NAWEC’s performance against the contractual performance targets; (iii) identify the causes of any major variances from the approved budget figures and action plans; (iv) assess the impact of external factors on The Enterprise’s performance (and in particular, the impact of Government measures); (vi) propose corrective measures, when needed, to realign KPIs with performance targets.
Identify specific capacity building needs of DPPP&PE and PURA’s units/staff to critically review performance reports.

Capacity building program

Based on the capacity building needs identified through Task 2, design a capacity building program for DPPP&PE and PURA’s units/staff. The program will include inter alia : topics to be covered, key expertise/capabilities to be developed, list of identified participants and timeline.
Implement the capacity building program agreed with MoFEA and PURA. Considering uncertainties due to COVID-19, the cost of the training –transport, lodging, per diem, and any other– will be paid on a time-based method and based on actual costs subject to the submission of supporting documents.

IV. Other provisions

The Consultant has, subject to strict respect for their confidentiality, a right of access and copy for all documents and information necessary for the performance of his mission and a right of visit to all sites and facilities managed by NAWEC. It is the recipient of periodic activity reports published by NAWEC, the list of which will be determined by mutual agreement.

NAWEC, MoFEA and PURA will facilitate the accomplishment of the mission of the Consultant. To this end, they must in particular:

a) allow access to public service facilities at any time by the Consultant;
b) designate competent representatives to answer questions asked by the Consultant and ensure their presence and availability for the duration of the assignment;
d) make available to the Consultant, for the duration of each of his assignments, an office equipped to accommodate at least 4 members of its team.

V. Deliverables and timeline

The Consultant is expected to submit the following main outputs in accordance with the tasks described above:

Activity / Deliverable	Delivery date	Payment
1. Signing of contract	Contract signature date	10%
2. Inception Report	2 weeks after contract signature	5%
3. Develop Reporting templates for the monitoring mechanism	1 month after contract signature	5%
4. First quarterly report on NAWEC performance and MoFEA commitments	3 months after contract signature	5%
5. 8 additional quarterly reports on NAWEC’s performance and MoFEA commitments (Q2 and Q3 of 2021; Q1, Q2, Q3 of 2022; Q1, Q2, Q3 of 2023;	Quarterly	2.5% for each report (20% in total)
6. First annual performance evaluation on NAWEC’s KPIs and MoFEA commitment		15%
7. Two additional annual performance evaluation on NAWECs KPIs and MoFEA commitments including (i) calculation of NAWEC’s annual global indicator; (ii) recommendations for updated to the annual KPIs.	Annual	10% for each report (30% in total)
8. Delivery of capacity building program		10%

All reports will be submitted in English so that relevant Government agencies can review them.

Qualifications

The Consultant should be a consulting firm or a consortium of consulting firms with at least 7 years of relevant project experience, both technical and regional. Relevant technical experience would include projects related to utility reform and Monitoring, Reporting and Verification (MRV) systems. In case of international firms, they are required to partner with local firms to carry out this task.

The Consultant must propose a team capable of successfully carrying out all aspects of the ToRs with local/international in-depth experience in executing similar assignments. The exact composition of the team will be left to each firm to propose, but key expertise and specialists expected to be included are outlined below.

Expert Position/expertise	Qualification and experience of key personnel
1. Team Leader- Utility expert	Minimum of Masters level degree in Electrical Engineering/Economics/Finance/Operations or other relevant field Minimum 15 years’ of international experience in electricity utility operations with high-level involvement in both generation and T&D operations; 5 years of which at Senior Management/ Leadership level. Project/Program management experience of at least 5 years required. Experience in Africa required.
2. Monitoring, Reporting and Verification (MRV) expert	Minimum of Masters level degree in Electrical Engineering/Economics/Finance/Operations or other relevant field, Minimum 15 years’ of international experience in electricity utility operations and MRV systems Project/Program management experience of at least 5 years required. Experience in Africa required.
3. Financial specialist	Minimum of MSc level degree in Finance/Accounting or ACCA qualification Minimum of 10 years of professional experience in financial analysis and auditing of utilities. Experience in Africa required.
4. Commercial specialist	Minimum of BSc level degree in a relevant subject. Minimum of 10 years of professional experience in commercial aspects of utilities. Experience in Africa required.
5. Power Engineer	Minimum of BSc degree in electrical engineering. Minimum of 10 years of professional experience, out of which minimum of 5 years experience with HFO and LFO reciprocal generating engines similar to the ones operated by NAWEC. Experience in Africa desirable.
6. Water Engineer	Minimum of BSc degree in water engineering. Minimum of 10 years of professional experience. Experience in Africa desirable.

Period of Performance

The project will have a total time for execution of 36 months.

Position	Estimated staff-months
Team Leader- Utility expert	4
Monitoring, Reporting and Verification (MRV) expert	2
Financial specialist	4
Commercial specialist	2
Power Engineer	2
Water Engineer	2
Contingency	4
Total staff months	20

Annex 1 – KPIs included in 2021 PC (draft)

No	Performance Indicators	Definition	Weighting
1	Profit after Tax	Net Profit after Tax / Turnover	10%
2	Return on Net Assets	Net Profit after Tax / Total Assets	10%
3	Current Ratio	Current Assets / Current Liabilities	10%
4	Debtor Days	Debtors / Sales Turnover x 365	10%
5	Total Losses Electricity [ATC&C]	Aggregated Technical, Commercial and Collection Losses	15%
6	Training Days	Actual Training Days	5%
7	New Electricity Connection Days	Days from payment to actual energising	10%
8	Outage Numbers Electricity	Annual Average number of recorded outages (system-wide blackouts)	10%
9	Execute engine maintenance plan	Number of engines maintained on schedule (major overhaul) and back in operation	5%
10	Third party monitoring of fuel quality	Percentage of The Enterprises HFO and LFO fuel deliveries to the port which are tested by a third party	5%
11	Develop a water efficiency KPI	Develop a water efficiency KPI (e.g. ATC&C for water) with clear definition and systems in place to measure it.	5%
12	Develop a water service quality KPI	Develop a water service quality KPI with clear definition and systems in place to measure it.	5%
Total			100%

[1] First Fiscal Management and State-Owned Enterprise Performance Development Policy Financing and Gambia Electricity Restoration and Modernization Project (GERMP)

[2] See Annex 1

To view Request for Expressions of Interest For Performance contract click the link below

REOI for Performance Contract