November 4, 2003	Tuesday	Ramazan 8, 1424

ISLAMABAD, Nov 3: Five utility operators and financial investors have submitted expressions of interest (EoIs) to the Privatization Commission to purchase Karachi Electric Supply Corporation (KESC).

This is in response to the government’s offer early last month to offload 73 per cent equity shares of the power utility along with its management control.

The Asian Development Bank has already reached an understanding with the government to take an equity interest in KESC of 7.67 per cent from the available 73 per cent at privatization.

The parties who have submitted their EoIs include: ABB (Pvt) Limited of the US; Corner Stone Partners LLC of the US; Hasan Associates (Pvt) Limited Consortium, including Al Bayarak Al Baida Company of Kuwait and IOSKOM of Turkey; Independent Power Corporation PLC of the UK; and Kanooz Al Watan for Project LLC of Saudi Arabia.

KESC is a vertically integrated electric utility supplying power to the country’s largest industrial and commercial centre — Karachi — besides industrial part of Thatta and the Lasbella districts.

In total the KESC franchise area covers approximately 6,000 square kilometres with a population in excess of 12 million. The government has undertaken to continue with the approved current investment programme (until June 2006) to upgrade the transmission and distribution system and to underwrite the formula based tariff regime as determined by the National Electric Power Regulatory Authority (Nepra) in September 2002.

The parties having submitted EoIs and with relevant credentials will be dispatched a request for statement of qualifications (RSoQ), starting on October 8, 2003. The statement of qualifications (SoQ) would be received by the Privatization Commission till December 15, 2003.

The sell-off process is expected to be completed in January next year. The ADB will purchase 7.67 per cent shares at the rate that emerges in the open bidding of KESC.

The KESC loans have already been converted into equity by the government a year ago with the aim to ensure the smooth privatization of the company. The new buyer would, however, have to invest around $400 million in the company for transmission and system improvement, sources said.

A couple of months back the federal government steering committee for restructuring and privatization of KESC set November 21 deadline for the sell-off of the company. The deadline, however, had to be extended till January 2004 to meet some basic formalities.

IPC, the British power company, which is also a major shareholder in 1,292-mw Hub Power Company, has already placed a major chunk of its shares in Hubco in the Central Depository Company (CDC). The sources said the company intended to offload share in Hubco to invest in the proposed KESC sale.