Pre-qualified bidders assured of timeline extension
WASIM IQBAL
ISLAMABAD: The Privatisation Commission has assured the pre-qualified bidders for the privatisation of two RLNG power plants (Haveli Bahadursha and Balloki) to extend the timelines for the transaction in the wake of coronavirus pandemic.
In the wake of coronavirus pandemic, the pre-qualified bidders had asked for extension in the timelines.
Federal Minister Muhammadmian Soomro has indicated to review/reconsider the timelines based on facts/situational analysis and rapidly changing national and international market scenarios.
The Privatisation Commission continues to keep foreign investors engaged in the privatisation plan. The federal minister along with the Advisor to PM on Energy, Nadeem Babar, held a series of video-conferences/meetings during the current week with the pre-qualified investment parties for the privatisation of two power plants of the National Power Plant Management Company Limited (NPPMCL).
Babar replied to questions and queries raised by the investors.
Chairman Nepra also joined the discussion.
The privatisation of two power plants is being carried out on priority basis.
Under the supervision of the federal minister, the impending legal and technical issues have been sorted out amicably with the provincial governments and line ministries.
These include true-up tariff by the Nepra, amendment in the land conversion rules and water use agreement for power plants by the government of Punjab and alignment of gas supply and power purchase agreements by the Power Division and the Petroleum Division in the context of the RLNG agreements, prevalent till 2025.
The relevant information has been uploaded on Virtual Data Room (VDR) for due diligence by the pre-qualified bidders.
Presently investors’ due diligence is in progress, but physical site visits of the pre-qualified bidders could not be scheduled due to the current national and international lock-down situation and travel restrictions.
The federal minister also reiterated that the revival of Pakistan Steel Mills Corporation is one of the most important objectives of the Ministry of Privatization.
Financial Advisors’ Services Agreement (FASA) was signed in January this year with Pak-China Investment Company and Bank of China (BoC).
The progress towards that end started on a steady pace.
In spite of travel advisories and other issues, and at the insistence of PC, Sinosteel team from China has recently been on a visit to Pakistan.
All matters regarding legal, financial and land issues of the PSM have been discussed with concerned stakeholders.
The first draft of the HR, financial and tax due diligence has been shared by the financial advisors on April 1, 2020.
The draft DDs on HR Financial and Tax have been shared with Ministry of Industries and Production and Management of Pakistan Steel Mills on 2nd April, 2020 for their review and inputs before placing the DDs and proposed transaction structures for approval of competent forum.
Likewise, SME Bank Privatisation is also at conclusion stage.
Prequalification of five investors who have submitted their SOQs is likely to be completed by next week and buyers side due diligence to be completed by end of May provided current pandemic situation improves to some extent.
Furthermore, transaction structures of Services International Hotel and divestment of Pak re-insurance shares have been finalised.
However, strategy is being devised in consultation with financial advisors (FAs) to market both these transactions in due course of time depending on the prevailing market conditions and economic situation.
The Privatisation Commission was given a target of revenue generation of Rs150 billion through privatisation proceeds in the current financial year 2019-20.
