KARACHI (May 08 2003) : Karachi Electric Supply Corporation (KESC) will be privatised within three months, Federal Privatisation and Investment Minister Dr Abdul Hafeez Shaikh said.
“We will announce the final date in three or four weeks for inviting interested parties and call the bidding in next six weeks,” he said while talking to newsmen after presiding over a meeting of the Pak-Kuwait Investment Board on privatisation of KESC here on Wednesday.
The minister said the government would be making every effort to complete the privatisation process as early as possible and getting rid of the status quo would be very essential to move ahead.
KESC was incurring loss of Rs 1.5 billion every month, he said.
He said all the issues hindering the process, including legal issues, land ownership dispute between the federal and the provincial governments, claims of banks against the KESC property and KESC property valuation would be settled by May 22, 2003.
He said basic idea behind the privatisation of KESC was to provide better service to the utility's consumers at low rates, especially to encourage industries.
“We are very much concerned about 12 million KESC consumers. I hope there will be no increase in tariff,” Hafeez said.
He said the KESC was a high transaction entity and there were bright prospects of investment from within the country and outside.
He said potential investors from Pakistan would be welcomed first. However, the investors from the Middle East, Europe and United States would be interacted in this regard.
Prince Karim Aga Khan had been requested to invest in the KESC and that his representative participated in the meeting and Shahid Burki who had set up a large Investment Fund has also shown interest in KESC.
Hafeez said, “We would like to sell KESC on “as is where is” basis and the task of improvement/updating would be left to the private sector management.
Referring to the earlier meeting, the minister said various options came under discussion, including broad-based sharing of KESC shares with convertible bonds, enhanced management contract, unbundling and formation of joint consortium of investors and businessmen.
He said it was decided that a Concept Paper would be prepared by a leading group of investors in the city, which would be discussed in the forthcoming meeting, schedule to he held next week.
About the privatisation of Habib Bank Limited, the minister said that so far four expressions of interest (EoIs) were received and more were expected.
Prince Aga Khan had also assured President Musharraf for investment in the HBL.
Besides, domestic investors potential investors from Malaysia, Saudi Arabia, the Middle East was also expected to participate in the HBL bidding, Hafeez Shaikh said.
He said the investors would be apprised of the investment opportunities, here especially in reference to KESC, HBL and PSO, during President Musharraf's forthcoming visit to the United States and the United Kingdom.
To a question, Hafeez said the major issues between the Pakistan State Oil (PSO) and government agencies had been settled.
The government would announce the date of its bidding very soon, he said.
The meeting was also attended by Privatisation Secretary Ahmed Waqar and Board of Investment (BoI) Secretary Shuja Shah.