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Addressing a pre-bid meeting held at Karachi today for the privatization of
Jamshoro Power Company (JPC) Dr. Abdul Hafeez Shaikh Federal Minister for
Privatisation & Investment said that electricity was an important sector after
the privatization of KESC and this area demanded momentum and the pace of
privatization in this sector would accelerate.
The meeting was informed that six pre-qualified have completed the due
diligence of JPC in the data room, which was opened in April 2003. The parties
include 1. Al-Abbas Power Generation Limited, 2. Engro Chemicals Pakistan
Limited, 3. National Power Generation & Supply Company Limited, 4. China
National Machinery & Equipment Import & Export Corporation, 5. Metro
Securities (Pvt) Ltd and 6. United Bank Limited/ SIEMENS/ GAZ Power. Today
four parties attended the pre-bid moot except parties at Sl No: 1 and 3. It
was also disclosed that the bidding of JPC would be held by June this year.
The moot deliberated upon the process and responded to the queries of the
prospective bidders for the privatization of JPC. The transaction is now at a
very advanced stage. After today's meeting the next phase of finalization of
bid documents and the bidding arrangements for JPC would be completed.
Mr. M. Tahsin Khan Iqbal Secretary PC, Mr. Mahmood Shah Member PC Board,
representative of NEPRA and other stake holders were also present during the
meeting.
Jamshoro Power Company Limited (JPC) located in Sindh Province of Pakistan was
established as a result of the unbundling of Pakistan Water and Power
Development Authority (WAPDA). It was organized to take over all the
properties, rights, assets, obligations and liabilities of three thermal power
stations namely Jamshoro, Kotri and Lakhra with a total nameplate capacity of
1204 MW. The company was incorporated in August 1998 as a public limited
company under Pakistan Companies Ordinance 1984. Subsequently in June 2002,
the Lakhra Power Station with a nameplate capacity of 150 MW was spun out of
JPC into a new company, Lakhra Power Generation Company Limited. JPC has been
granted a Generation License by National Electric Power Regulatory Authority (NEPRA)
to engage in generation business pursuant to the Regulation of Generation,
Transmission and Distribution of Electric Power Act, 1997 (NEPRA Act).
The Government of Pakistan intends to sell a majority 51% interest in JPC
including management control to a strategic investor or a consortium of
strategic and financial investors. The GoP intends to hold 49% of the equity
beyond privatisation. JPC facilities are located within the environs of
Hyderabad with key connections to the NTDC grid to enable power to be injected
to major load centers in the South of the country including Karachi. JPC
facilities compete with other grid connected power plants in Pakistan for
position in the merit order including hydel plants and would remain important
part of overall generation portfolio of Pakistan for many years to come. Power
Purchase Agreement (PPA): JPC is to be sold pursuant to a PPA with multi-year
tariff to be approved by NEPRA. The PPA has been carefully designed in
accordance with recognized international utility practice to allow full
recovery of prudent costs.
The economic life of JPC assets if well maintained would extend beyond the PPA
term to offer extra value capture in post PPA. Regulatory Framework: JPC would
have the transparent oversight of NEPRA, Pakistan Power Sector's independent
regulator, established in 1997 to protect interests of both the investor and
the sector.