September 11, 2002	Wednesday	Rajab 3, 1423

ISLAMABAD, Sept 10: The Privatization Commission (PC) here on Tuesday claimed that the UBL transaction was transparent and was very much in line with the required procedure.

A spokesman for the PC in a statement said that UBL transaction has attracted a lot of publicity and almost every day there is some news item or article appearing in the media hotly debating the transaction and its outcome.

To clear the air of half-truths, inaccuracies and conjecture, the spokesman stated that contrary to what is being stated, both the general procedures as laid down in the Privatization Ordinance 2000 and the specific set of procedures/instructions developed for the UBL transaction were observed.

The PC remained within the ambit of its transaction process. MCB’s enhanced bid of Rs12 billion was placed before the Cabinet Committee on Privatization (CCoP) along with the Rs12.3 billion offer by the Consortium of Abu Dhabi Group & Bestway Group for deliberation and decision.

After detailed discussion, the CCoP decided that a re-bid in which all the parties be invited would be a fair and transparent way to maximize the proceeds which was the prime public policy paradigm, once the parties had been pre-qualified.

For the re-bid to be meaningful a level playing field had to be provided to all the three parties. This was a decision that the CCoP was both competent and empowered to take such a decision.

It must be kept in mind that the Board of the PC has no authority when it comes to acceptance, rejection or laying down any conditions for a bid or modifying the conditions once the bidding has taken place, he said.

It had been very clearly mentioned in the Bidding Instructions that the Letter of Acceptance (LoA) would be issued to the successful bidder after approval of the CCoP. The CCoP, it may be added, is not bound by the recommendations of the Board of the PC, he maintained.

He further explained that when the CCoP decided that a re-bid should take place, all three qualified bidders were invited to the bidding. In fact during the bidding, the PC went out of its way to give MCB an opportunity to participate - to the extent of allowing their representative extra time to confer with the sponsors.

If MCB did not avail the opportunity to participate in the re-bid for UBL, it did so on its own volition. The point to keep in mind is that only the qualified parties were invited to the re-bid.

It was after a long and gruelling pre-qualification process, in which the ability and competence within a multidimensional capability matrix was assessed, that they were pre-qualified to acquire UBL. Within this set of qualified bidders, the government was indifferent in terms of who finally became the successful bidder. In essence, after the three parties were qualified, price maximization became the pertinent driving force of the process.

There was no other consideration, whatsoever, except of course, clearance of State Bank of Pakistan to the three parties and SBP’s approval to the funding plan of MCB for protecting the depositors’ money, he explained.

Referring to the statements attributed to the Minister for Privatization, the spokesman stated that these were misquoted and out of context.

The minister made no statement conveying the impression that the matter relating to UBL transaction would be referred to the Federal Cabinet for decision. Neither did he state that PC was happy to hand over the Bank to MCB after receiving its improved bid of Rs12 billion.

The final authority in privatization matters including those regarding the fate of any bid is the CCoP, he added. There would have been merit in what is being stated with regard to the procedures if the fresh offer by the Consortium of Abu Dhabi Group & Bestway Group had been considered after MCB’s bid had been approved by the CCoP and LoA issued.

That process had still to be completed. All the facts including the offer of Abu Dhabi and Bestway Group were duly considered and appropriate legal advice was also obtained, the spokesman added.