ISLAMABAD, March 27: The Privatization Commission has invited qualified investors or consortia of strategic/financial investors to submit their expressions of interest (EoIs) for acquiring a 51 to 74 per cent interest in Karachi Electricity Supply Corporation and assuming management control.

The government had approved an action plan last week for marketing the KESC in order to complete the deal by September 2002.

The financial adviser for the KESC — Pricewaterhouse Coppers — had been directed to arrange the road shows both in and outside the country to have a better price for the state sector power company.

A high-level task force, headed by the privatization minister, has also been set up to ensure adherence of tight schedule to prepare for the disinvestment of KESC.

Parties with relevant credentials, who submit an EoI will be dispatched a request for statement of qualification (RSoQ) starting on April 18, 2002. Early submission of EoI will allow parties maximum time for competition of their RSoQ requirements. The last date to turn in the statement of qualification is May 31, 2002.

According to the officials of Privatization Commission, several key activities related to financial restructuring, regulatory framework and ensuring a smooth transaction were being taken to make the KESC a financially viable organization.

The successful consortium is expected to finance the KESC’s substantial investment needs during the next few years. A formidable investment is needed to improve the reliability and quality of electricity services to consumers as well as to prevent energy losses.

According to the officials, the government will introduce a fresh law that will allow the new buyer of the KESC to recover dues from the government agencies and hospitals without much hassle. The new buyer is expected to inject $300 to 400 million in the company.

The KESC is almost 99 per cent government owned company whose most of the debt had been converted into equity. A modernization and upgradation plan for the KESC is also under way with the financial help of the Asian Development Bank.

Officials said the government was also planning to change the law so that future buyer of the KESC should share its profits with the consumers. “We will prescribe certain limit of profit and if that limited is exceeded, the new buyer will have to offer certain percentage of this profit to the electricity consumers,” an official said. The issue, he said, would be decided with the active support of the National Electricity Power Regulatory Authority (Nepra).

According to the Privatization Commission, the KESC is the vertically integrated electric utility supplying power to Karachi. In addition, it supplies power to the industrial part of Thatta and the Lasbella district. In total, the KESC franchise area covers approximately 6,000 square kilometres, with a population in excess of 12 million.