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Dr. Abdul Hafeez Shaikh Federal Minister for Privatisation & Investment has
said that the transfer of management control of Karachi Electric Supply
Company (KESC) to the consortium of Hasan Associate (Pvt) Limited would
provide best service to the industry, reduce the cost of doing businesses and
would also improve the efficiency. He was addressing the ceremony held for the
transfer of GoP's 73 % shares in KESC with management control to the
consortium of Hasan Associates with Al-Jomaih Holding Co. KSA and Premier
Mercantile Services here today. 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.
Dr. Abdul Hafeez Shaikh said that after receiving the remaining amount for
KESC PC has so far received US $ 258 million (in terms of Pak Rupees
translates as Rs. 15. 9 billion of the total bid offer of Rs.20.2 billion),
which would also increase the FDI. The buyer will 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 Minister further stated that the completion of KESC transaction would send
strong signal to the investors and would speed up and also give impetus to the
overall Privatisation Program of Pakistan. Being a landmark transaction in the
power sector it would 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 and would convey to the world the
government's commitment toward the privatisation process.
He added that 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
with the support of President General Pervez Musharraf, Prime Minister Shaukat
Aziz, members of CCOP & Privatisation Commission Board, PC Staff &
Secretariat, Ministries of Water & Power, Finance and Financial Advisor
Pricewaterhouse Cooper.
Dr. Shaikh stated that the experienced team and the newly constituted board of
KESC, which included reputable persons from the private sector, would protect
the consumers' rights. After KESC, the process of completing PTCL transaction,
pre-bid conference for the privatisation of PSO and to further process the
privatisation of PPL, NIT and PSMC on fast track basis would be conducted.
Privatisation of Pakistan Steel would be completed by mid January 2005, he
told.
The share transfer documents for the privatisation of Karachi Electric Supply
Company (KESC) were signed and handed over by M. Tahsin Khan Iqbal Secretary
PC to the authorized representative of the consortium Mr. Shan A. Ashary of
Al-Jomaih Holding Company. Mr. Farooq Hasan of Hasan Associates, Mr. Haleem
Siddique of Premier Mercantile Services and Mr. Ashfaq Ahmed Secretary
Ministry of Water & Power were also present. (continued on next page...)
Mr. Shan A. Ashary of Al-Jomaih said that no employee of KESC would be
retrenched. Mr. Frank Scherschmidt, the new Chief Executive Officer (CEO) of
KESC said that the company was already under staffed. Our goal was to make
Karachi again a city of lights and for this we would train and motivate the
staff to make company much more customer oriented by improving the power
generation and reducing the losses.
The Consortium of Hasan Associates being the second highest bidder for KESC
had 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).
KESC has been running into losses for over a decade and 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.