ISLAMABAD, Nov 29: The government on Tuesday handed over the Karachi Electric Supply Corporation to a consortium after receiving Rs15.9 billion of the Rs20.24 billion highest matched bid.
The remaining Rs4.34 billion will be invested by the new buyer for improving the utility that has been running into ‘technical’ losses for years.
This finally completed the transfer of 73 per cent shares along with management control of the KESC to private sector - a process that has faced a lot of problems since the government decided to privatize the utility in mid-1990s.
The most immediate challenge for the new buyer will be to reduce KESC’s losses and control frequent power breakdowns in Karachi.
The consortium comprises the Hasan Associates, Al-Jomaih Holding Company of Saudi Arabia and Premier Mercantile Services.
Privatisation Commission Secretary Tehsin Khan Iqbal signed the transfer documents and handed them over to the attorney of the consortium.
Speaking on the occasion, Privatisation and Investment Minister Dr Abdul Hafeez Shaikh said the KESC’s transfer would provide better service to the industry, reduce cost of doing business and improve its efficiency.
He said the buyer would invest $500 million in KESC in three years and $75 million of them during the current fiscal year.
The minister said the KESC sale would be followed by that of the Pakistan Telecommunication Company, Pakistan State Oil, Pakistan Petroleum Limited, National Investment Trust and Pakistan Steel Mills Company.
He said PSMC privatisation would be completed by mid January 2005. He said negotiations with Etisalat were continuing to take the PTCL sale to its logical conclusion.
However, he declined to discuss details of post-bidding negotiations with the UAE firm that had failed to deposit bid money by the twice extended deadline.
Shan A. Ashary of the Al-Jomaih group made a clear commitment with the authorities that the new management would not retrench KESC employees, saying the utility was still under-staffed.
Instead, the new management would train the existing workforce and hire more to improve the utility, he added.
Frank Scherschmidt, the new Chief Executive Officer of the KESC, said they would train and motivate the staff to make the company customer-friendly.
