Offloading: Plan to sell over a Dozen Entities

Society Pakistan & World Affairs
1

**Although Privitization of PSEs is not a panacea but still we need to get rid of these rotten PSEs

Time to save Rs. 500 Billion which we have to waste on these PSEs

Good working by PC and Zubair Umar !
**

Offloading: PC approves plan to sell over a dozen entities

By Shahbaz Rana
Published: July 24, 2014

http://i1.tribune.com.pk/wp-content/uploads/2014/07/740193-save-1406168031-250-640x480.jpg

Generating finances: $2 billion is expected to be raised through this privatisation plan 26% shares of the PIA are committed to be sold to strategic investors. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: The Board of Privatisation Commission (PC) has approved an ambitious agenda of privatising about one and a half dozen entities during the current fiscal year to raise $2 billion besides allowing the PC to hire services of four consortiums as financial advisers (FA) to complete as many transactions.

Among 16, the most significant transaction will be of Pakistan International Airlines (PIA) and the PC Board has picked a consortium led by** Dubai Islamic Bank (DIB**) to complete the transaction by June 2015.

Five international consortiums had shown interest to become the FA for selling a minimum of **26% **government stake in the national flag carrier.

http://i1.tribune.com.pk/wp-content/uploads/2014/07/429.jpg

The consortium that emerged victorious is made up of the DIB, IATA Consulting, which has expertise in aviation business, audit firm Deloitte, local legal firm Haidermota BNR, international legal firm Freshfields Bruckhaus Deringer, human resource expert Abacus Consulting, local communication strategy firm APCO and Prestige – an international communication strategy firm.

There has been criticism that **Deloitte **has remained an auditor of the PIA, thus there was conflict of interest. The chairman Privatisation Commission Mohammad Zubair said Deloitte was the external auditor of the PIA till December 2013 and was eligible to become member of the consortium.

The incumbent PIA’s external auditors were the KPMG and the PWC, he added. Zubair said the auditors will have to play a critical role in restructuring, leading to privatisation of the PIA.

http://i1.tribune.com.pk/wp-content/uploads/2014/07/529.jpg

Under the $6.7 billion International Monetary Fund loan programme, Pakistan has committed to selling 26% shares in PIA to strategic investors. Initially, the deadline was June 2014, which has now been revised to June 2015.

The transactions have been planned to improve governance in these entities and ensure service delivery.

The board also approved to hire financial advisors for** National Power Construction Company (NPCC), Northern Power Generation Company Limited (NPGCL)** and Faisalabad Electric Supply Company Limited (FESCO). The government will sell the strategic assets of these companies.

The PC Board approved the new calendar at a time when Pakistan Peoples Party (PPP) has criticised the government’s privatisation plan, accusing it of violating the Constitution by selling entities that fall under the joint control of federal and provincial governments.

For NPCC, the consortium comprising **KASB, HMCO **and **Deloitte **obtained the highest scores of 95.19 and was pricked by the PC Board to perform the task. The government plans to complete the transaction by end of this year.

For selling FESCO the consortium comprising UBL, Earnest & Young, Lahmeyer, HMCO & BN&R and Excelerate got the maximum points of 99.75 and were appointed as the financial advisor.

FESCO will be the first power distribution company that the government wants to sell after Karachi Electric Supply Company. The deadline for privatising FESCO is May 2015. However, it is subject to resolution of outstanding issues, particularly post-privatisation regulatory framework.

The PC Board also hired the FA for the restructuring and privatisation of **1,350 megawatts thermal power station **being run by Northern Power Generation Company Limited (NPGCL). The UBL-led consortium that has been picked for Fesco will also be the FA for NPGCL.

According to the privatisation programme approved by the board, the government will complete the **Oil and Gas Development Company Limited (OGDCL) **capital market transaction by October this year. It has already hired a financial advisor that is currently working on the transaction structure to sell 10% shares of the company at London Stock Exchange.

**Allied Bank Limited, Habib Bank Limited, State Life Insurance Corporation, Pak-Arab Refinery Limited, Mari Petroleum Limited, Government Holding Company, Heavy Electric Complex, Lahore Electric Supply Company, Islamabad Electric Supply Company, PIA’s hotels in New York **and Paris and Convention Centre Islamabad will also be privatised during the current fiscal year.

The federal government has budgeted** Rs198 billion ($2 billion)** earnings from these transactions.

In the first year of the PML-N government, the PC completed two transactions and fetched over Rs53 billion after selling the shares of the UBL and the PPL.
*

Published in The Express Tribune, July 24[SUP]th[/SUP], 2014.*

2

Re: Offloading: Plan to sell over a Dozen Entities

Sell-off of PSEs: FAs appointed

July 24, 2014
WASIM IQBAL & ZAHEER ABBASI0 Comments

http://www.brecorder.com/images/br-black.gif

Privatization Commission Board has approved the appointment of United Bank Limited and Ernst & Young-led consortium as financial advisers (FAs) to undertake the Privatization of Faisalabad Electric Supply Company (FESCO) and Northern Power Generation Company Limited (NPGCL).

The Board has also approved **Dubai Islamic Bank-led consortium **as financial advisers for strategic privatization of Pakistan International Airlines (PIA).

In another case, the board approved **KASB **as financial advisor for divestment of National Power Construction Corporation (NPCC). Sources said the meeting of the PC board was held on Tuesday; however, no official statement was issued on the appointment of financial advisor to media. The PC board has given its final approval to appointment of financial advisors on the basis of recommendations of evaluation committee.

An official told *Business Recorder *that everything was in the hands of the evaluation committee as far as appointments of financial advisors were concerned and the PC Board did not turn down any recommendation made by the evaluation committee.

Spokesman for the PC, when contacted, concurred and stated that the evaluation committee submitted its recommendations to the PC Board on the appointments of financial advisor after evaluating the financial and technical bids of interested bidders. The recommendations of the committee are then discussed in the PC board prior to granting final approval.

As many as five parties were in competition to provide financial services for sell-off of FESCO which included **BMA, Consortium of UBL and Ernst & Young, SSJBL and Burj Power, Alma Capital **and Grant Thornton. An equal number of bids were also submitted to the board meeting held on Tuesday for a financial advisor of PIA.

Dubai Islamic Bank and its partners **IATA consulting, Deloitte, Haidermota, Freshfields Bruskhaus Deringer, Abacus **and APCO were given 100 per cent points in both technical and financial bids by evaluation committee of PC. While technical bids of two consortia, led by Rothschild Group and Oliver Wymann and Mckinsy, MCB and Deloitte, were rejected for failing to secure a mandatory 70 percent and their financial proposals were not opened.

For divestment of FESCO, a group led by Ernst & Young, Haidermota BNR, United Bank Limited, Seabury and Excelerate and Freshfield Bruckaus, got 95 percent in technical bid, but ended up with 67.59 percent. The board gave approval on the basis of recommendations by PC’s evaluation committee, sources said.

The spokesman for PC committee told *Business Recorder *that the evaluation committee of the PC headed by Chairman and Minister of State Muhammad Zubayr was given presentations by potential parties for strategic divestment of 26 per cent shares with management control of PIA and a strategic sale of FESCO. The committee includes two members of the Board, Secretary, Director General and representatives from Ministry of Finance and concerned ministries.

An official of the PC said the criterion for the appointment of a financial advisor is that the Expression of Interest (EOI) is invited twice with a gap of 14 days. He added that transactions meant for international bidders are advertised in international media for appointment of advisor. The advertisements are made available on PC website and displayed on the website of **Public Procurement Regulatory Authority (PPRA).
**

Spokesman further added that all the rules and regulations of PPRA have been fully adhered to during the appointments of Financial Advisors that would assist the PC in divestment of public sector entities. **Chairman PC **is head of the evaluation committee and other members of the committee include two members of PC Board, Secretary PC, one representative of Ministry of Finance and the relevant ministry participates in short-listing process.

http://www.brecorder.com/top-stories/0/1205537/

3

Re: Offloading: Plan to sell over a Dozen Entities

That's good, but I am not sure of a few entities like power generation companies. I think the government should keep those in their own hands.

4

Re: Offloading: Plan to sell over a Dozen Entities

Most of it is just government offloading its shareholding and not the true privatisation in the classic sense of the word. However, the hemorrhaging giants like PSM and PIA need to be privatised. The distribution companies need to be carefully privatised so as to not further add to the misery of common folk.

5

Re: Offloading: Plan to sell over a Dozen Entities

**Exclusive Interview with Sami Ibrahim

**TopStory24July2014 - Video Dailymotion

6

Re: Offloading: Plan to sell over a Dozen Entities

sell it all away, good riddance to corrupt and politics everywhere

7

...."Earnest and Young"..?
Bawhawhaw

8

Re: Offloading: Plan to sell over a Dozen Entities

as financial consultants, not buyers.

9

I just expected a journalist to spell the name of the company right. Spell check misuse :-)

10

Re: Offloading: Plan to sell over a Dozen Entities

:) got it

11

Re: Offloading: Plan to sell over a Dozen Entities

I'll be reluctant to give it to any entity from Dubai, knowing their nature, i am sure they will do the same with PIA what Microsoft did to FoxPro when they bought it..

If such deal has to be made then, there should be terms and conditions attached to the payment ( recalling selling of PTCL and no receiving of money) and performance (KESC-Case).

12

Re: Offloading: Plan to sell over a Dozen Entities

Let us talk about just one privatization agenda PMLN government is putting forward. PSM.

PSM has around 18000 acres of land. Mush government detached around 12000 acres and sold PSM for $500 million in 2006 (Pakistan was getting £375 million for sale of 75 percent shares), with lots of promises of investment from new owners too. PMLN and PPP were against that privatisation and Choor Justice on haddi from PMLN sabotaged the sale. Role of PMLN in that sabotage of sale is well known.

Since 2008 Pakistan has spent over a billion dollars (could be much more) just in rescuing PSM from bankruptcies. Plus inflation has certainly increased the value of $500 million upward. Pakistan also lost huge amount of taxes that Pakistan could have collected if PSM would have got privatized then ... and divided on 25 percent PSM shares would have been extra. No rescue expenses for Pakistan government would have been added benefit.

It means, since 2007, to keep PSM in the hands of government costs the government around $2000 million.

If Nawaz government detaches 12000 acres of land from PSM land holdings, and sells PSM for around $3000 million then Pakistan would barely get even (most likely Pakistan would be losing even then).

So, let see how many acres of land area PMLN would detach before selling PSM and what price PMLN would sell PSM.

13

Re: Offloading: Plan to sell over a Dozen Entities

Profit making entities I would float on the stock exchange through IPO instead of offering to the rich. Loss making ones I would even give away so they were not a drain on the taxpayers and instead could contribute to the country through improved operations and more future taxes to the exchequer.

14

Re: Offloading: Plan to sell over a Dozen Entities

Panchhi pai, TI has said just opposite what you are marketing here in favor of Badshah Salamat. Who is Haidermota?

Transparency questions Privatisation Commission’s bidding process - Pakistan - DAWN.COM

I**SLAMABAD: The Transparency International Pakistan (TIP) has raised objections to the bidding process of the Privatisation Commission, alleging that ‘Haidermota-BNR’ has been given undue favour for the provision of financial advisory services in several projects with different joint ventures.

In the case of PIA, Haidermota BNR participated in the bidding process for procurement of financial advisory services with two joint ventures. It also submitted bids with two joint ventures in Fesco and bids with three joint ventures in the National Power Construction Company (NPCC).

Haidermota-BNR has consistently been violating PPRA rules and submitting more than one bid with different joint ventures, it alleged.

In a letter to Privatisation Commission Chairman Muhammad Zubair, TIP Chairman Sohail Muzaffar said the company should have been debarred by the PC because under the regulations of the Public Procurement Rules 2004 the standard bidding documents did not allow one bidder to participate in more than one joint venture.

Both joint ventures as per PPRA rules stand disqualified and should not have been allowed to participate in this as well as in future projects of the PC, according to TIP chairman.

Violating the PPRA rules in “appointment of Financial Advisory Services” by the commission might already have made the entire process of privatisation as non-transparent, as one favoured bidder had been awarded four projects in contravention to the rules, he said.

Know more: ‘Dubious’ hiring by Privatisation Commission

“This is to point out that in all joint ventures, all partners have to give commitments that all partners — jointly and severally — will be responsible for performance. A common firm in two joint ventures is also a conflict of interest, and amounts to cartelisation,” Mr Muzaffar said.

TIP urged the PC to scrap all the projects involved and restart the process of appointment of consultants in a transparent manner, and in compliance with the PPRA rules, the evaluation criteria should be given in RFP so that firms of integrity should participate, award the contract as per rules and perform on merit and at the most economical cost.**

Published in Dawn, Aug 2nd , 2014

15

Patwaris don’t believe in TI’s reports just like PPP never gave rats arse about TI.

Try using google other than midget porn search:smack: