Employment Performance Contract Sample Template Page 9
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12This document has been prepared for the purposes of the
PPP IN INFRASTRUCTURE RESOURCE CENTER FOR CONTRACTS, LAWS AND REGULATIONS (PPPIRC)
website. It is a sample document FOR REFERENCE PURPOSES ONLY and SHOULD NOT BE used as a "model".
The inclusion of any legal materials on the PPPIRC website does not mean that they are in any way approved,
endorsed or recommended by the World Bank Group or its affiliates. Legal advice should be sought to determine
whether a particular legal document is appropriate for any given project, and how the specific terms of the document
should be adapted to fit the circumstances of that project
6.7
Borrowing
Power Company shall have the right to borrow from lending institutions, including providing
security interest, Where a Government guarantee is required Power Company will seek the
approval of the MoE and the MoF in that regard.
6.8
Negotiations with the Recognized Trade Union
It shall be a requirement that achievement of performance targets will form part of the Collective
Bargaining Agreement and Power Company shall have the freedom to negotiate with the relevant
trade union on the performance targets, as it may deem fit.
ARTICLE 7: GOVERNMENT OBLIGATIONS
7.1
Capital Structure
It shall be the responsibility of Power Company to sustain a sound debt to equity ratio in order to
keep the financial risks of the company at the minimum, as the Government has no responsibility
regarding the capital structure of Power Company. Any borrowings by Power Company shall be
on the basis of commercial viability of the activities to be funded, taking into account the
generation tariffs provisions in the PPAs.
ARTICLE 8: PERFORMANCE INCENTIVES FOR POWER COMPANY BOARD AND
MANAGEMENT TEAM
8.1
Power Company has already been exempted from the provisions of the State
Corporations Act and is therefore paying its Board members, the Managing Director and its
employees competitive salaries and fringe benefits consistent with the private sector practices in
[COUNTRY]. In addition to these attractive terms and conditions of service, Power Company
shall pay its Board of Directors and its Management Team a Performance Incentive Bonus (PIB)
within four months after receipt of annual audited financial and other reports demonstrating
enhanced performance, based on the performance evaluation criteria enunciated in sub-article 8.2
below. The purpose of the PIB is to reward the Power Company Board and Management Team if
they are able to generate "good" or "excellent" performance. The incentives will provide a system
to motivate and guide the Board and Management Team to act in the interests of the company and
public as a whole and achieve some of the benefits of private sector management, while
remaining a strategic parastatal.
8.2
Criteria
8.2.1
Performance shall be measured by the achievement of the annual aggregate Indicator as
specified in Article 5 of this Contract.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)
Reviewed: Victoria R. Delmon, LEGPS
February 2008
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