PC seeks waiver for IFC appointment

Wants World Bank Group arm to be financial adviser.

ISLAMABAD: The Privatisation Commission (PC) is seeking exemption from the Public Procurement Regulatory Authority (PPRA) to appoint International Finance Corporation (IFC) of the World Bank Group as financial adviser without competitive bidding for privatisation of a power distribution company.

The commission seeks the waiver amid plans to advance the scheduled sale of all power distribution companies, with the first entity likely to be put on sale by July this year, said a senior official of the Commission.

If the PPRA grants the permission, the IFC could be hired as financial adviser without the competitive bidding process for strategic sale of either Islamabad Electricity Supply Company (Iesco) or Lahore Electricity Supply Company (Lesco), said the official.

A single consortium has qualified for the financial advisory services for both Iesco and Lesco but the PC has shown reservations to assign both projects to a single party due to capacity constraints. “One of these entities could be assigned to the IFC,” said the officials.

The issue of IFC’s role as FA was also discussed during a meeting between Finance Minister Ishaq Dar and IFC Executive Vice President Jin Yong Cai on Monday.

The IFC vice-president showed keen interest in extending its financial advisory services for the privatisation process, said Dar on Monday. He added that the IFC was also interested to fund 3,000 megawatts hydro and solar power projects.

The IFC is expected to invest about $500 million annually in Pakistan in the next few years as part of a World Bank Group Country Partnership Strategy.

World Bank’s conditions

The WB’s Country Partnership Strategy documents underscore the role of the IFC in reforming the state-owned enterprises. These papers state that “the IFC will support the privatisation transactions in the financial and infrastructure sectors through strategic investments.”

The policy matrix document also states that the IFC will make “direct investments” and mobilise investors for the divestment of large bank shares in Pakistan.

The WB Group has set a target of getting at least five state-owned entities restructured or privatised, at least three of which will be in the power sector. The IFC is interested in making direct investments in Lesco and Faisalabad Electricity Supply Company (Fesco), said Finance Ministry officials.

The government has decided to advance the calendar of privatisation of DISCOs and a briefing was also given to Prime Minister Nawaz Sharif. The decision was taken after it became evident that the government’s original plan to raise $4.5 billion in the current fiscal year was likely to be unsuccessful.

Reforms

Amid increasing work load, the PC has brought in new members on its Board. The federal government has removed three members, Farooq Khan, Ali Habib and Arif Saeed, after the trio was not attending board meetings, creating quorum issue and putting evaluation responsibilities on those who were attending meetings.

The government has appointed Ashfaq Yousaf Tola, a renowned chartered accountant, InfoTech Group President Naseer A. Akhtar, businessman Engineer Abdul Jabar, Irfan Group of Companies Chairman Yawar Irfan and Shahid Shafiq, an exporter, as new members of the PC Board.

Published in The Express Tribune, January 20^th,  2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.