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Dr. Abdul Hafeez Shaikh Federal Minister for Privatisation & Investment
will chair the transfer of GoP shareholding and management control of Karachi
Electric Supply Company (KESC) to the successful consortium of Hasan Associate
(Pvt) Limited on Thursday December 1, 2005 at Karachi. The signing ceremony of
bid documents and issuance of Letter of Acceptance (LOA) of Karachi Electric
Supply Company (KESC) was held on November 19, 2005.
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.
It is another success for the government after sincere efforts of the entire
stakeholder. Aljomiah Holding is a reputed name and their arrival in Pakistan
is 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. The new buyer will further
inject the capital in the company with changed management to improve the
quality of the services.
The first installment of the proceeds i.e. US $ 100 million has been received
while the buyer would pay remaining bid offer amount US $ 165 million by the
end of the current month, which will 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.
The 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).
Aljomiah Holdings Co. of Saudi Arabia has assured that their multinational
diversified group would extend full support to the management to work
together. Hasan Associates consider it a proud privilege to be associated with
a challenging transaction, which they hope will 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.