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The signing ceremony of bid documents and issuance of Letter of Acceptance
(LOA) of Karachi Electric Supply Company (KESC) was held here today under the
chairmanship of Dr. Abdul Hafeez Shaikh Federal Minister for Privatisation &
Investment here today.
The Bid documents for the privatisation of Karachi Electric Supply Company (KESC)
were signed by M. Tahsin Khan Iqbal Secretary PC, Mr. Farooq Hasan of Hasan
Associates, MD Aljomaih Holding Co. KSA Mr. Abdul Aziz Aljomaih and Mr. Haleem
Siddique of Premier Mercantile Services, which was followed by the issuance of
Letter of Acceptance (LOA) to the buyer on the payment of US $ 100 million.
Addressing on this occasion Dr. Abdul Hafeez Shaikh Federal Minister for
Privatisation & Investment said that it was another success for the government
after sincere efforts of all the stakeholder and being complex transaction the
support form the top level of the government including Presdient Pervez
Musharraf and Prime Minister Shaukat Aziz.
He said that Aljomiah Holding was a reputed name and their arrival in Pakistan
was a good sign for the Privatisation Program of Pakistan. All pervious
governments had tried their best to improve the efficiency of the company in
the largest interest of the consumers and this government was also motivated
to bring the transaction to a concluding point, he added.
Dr. Hafeez Shaikh said that our government continued to show our resolve to
achieve improvements, which resulted in recognition our program in the world
as a transparent process. He hoped that the new buyer would further inject the
capital in the company with changed management to improve the quality of the
services.
He informed that the first installment of the proceeds i.e. US $ 100 million
was being realized today while remaining bid offer amount US $ 165 million
would be paid by the buyer by the end of the current month, which would follow
the transfer of management control of the company. The buyer would invest US $
500 million in KESC over a period of three years while during the first
phase the buyer will invest US $ 75 million.
It was informed that Consortium of Hasan Associates being the second highest
bidder for KESC agreed to match the highest offer given earlier by Kanooz Al-Watan
of Saudi Arabia during the bidding for KESC on February 4, 2005 but
Kanooz-Al-Watan Group failed to deposit the bid money within the stipulated
period. Recently during a meeting of the full Federal Cabinet the improved
offer of Rs.20. 24 billion of Consortium of Hasan Associates was accepted for
Karachi Electric Supply Company (KESC).
While appreciating the professional support of PC MD Alomiah Holdings Co. of
Saudi Arabia Mr. Abdul Aziz Aljomiah said that assured that his multinational
diversified group would extend full support to the management to work
together. Mr. Farooq Hasan of Hasan Associates said that it was a proud
privilege to be associated with a challenging transaction, which he hoped
would benefit all the stakeholders particularly the life of 50 million people
of Karachi.
KESC has been running into losses for over a decade and is badly bleeding the
exchequer by about over Rupees one billion a month. The privatisation of KESC
will bring better services through professional management, new investment,
technology and employment benefits. The measures taken for the interests of
the workers include offering of 20 % increase in salaries to the contract
employees and 10 % shareholding of KESC to the employees.
The completion of KESC transaction will send strong signal to the investors
and will also give impetus to the overall Privatisation Program of Pakistan.
It will be a landmark transaction in the power sector, which will not only set
the scene for a rapid turn around of KESC but also for the privatisation of
other electric utilities and for significant investment in the infrastructure
of Karachi.