Dr Abdul Hafeez Shaikh, Federal Minister for Privatisation and Investment, will chair the transfer ceremony of Government of Pakistan shareholding and management control of Karachi Electric Supply Company (KESC) to the successful consortium of Hasan Associates (Pvt) Limited on December 1 at Karachi.
According to Privatisation Commission (PC), the signing ceremony of bid documents and issuance of Letter of Acceptance (LOA) of the KESC was held on November 19.
The bid documents for the privatisation of KESC were signed by PC Secretary Tehsin Khan Iqbal, Farooq Hasan of Hasan Associates, Managing Director Aljomaih Holding Co KSA Abdul Aziz Aljomaih, and Haleem Siddique of Premier Mercantile Services, which was followed by the issuance of the LOA to the buyer on the payment of $100 million.
Aljomiah Holding is a reputed name and their arrival in Pakistan is a good sign for the privatisation programme.
All pervious governments had tried their best to improve the efficiency of the KESC in the largest interest of the consumers and this government was also motivated to bring the transaction to a concluding point. The new buyer will further inject the capital in the company with changed management to improve the quality of the services.
The first instalment of the proceeds ie $100 million has been received while the buyer would pay remaining bid offer amount $165 million by the end of the current month, which will be followed by the transfer of management control of the company.
The buyer would invest $500 million in the KESC over a period of three years while during the first phase the buyer will invest $75 million.
The Consortium of Hasan Associates being the second highest bidder for KESC agreed to match the highest offer given earlier by Kanooz Al-Watan of Saudi Arabia during the bidding for KESC on February 4, 2005 but Kanooz failed to deposit the bid money within the stipulated period.
Recently during a meeting of the Federal Cabinet the improved offer of Rs 20.24 billion of Consortium of Hasan Associates was accepted for the KESC.
Aljomiah Holding has assured that its multinational diversified group would extend full support to the management to work together.
Hasan Associates considers it a proud privilege to be associated with a challenging transaction, which they hope will benefit all the stakeholders particularly the life of 50 million people of Karachi.
Karachi Electric Supply Company has been running into losses for over a decade and is badly bleeding the exchequer by about over Rs one billion a month.
The privatisation of KESC will bring better services through professional management, new investment technology and employment benefits.
The measures taken for the interests of the workers include offering of 20 percent increase in salaries to the contract employees and 10 percent shareholding of the company to the employees.
The completion of KESC transaction will send strong signal to the investors and will also give impetus to the overall privatisation process in the country.
It will be a landmark transaction in the power sector, which will not only set the scene for a rapid turn around of the KESC but also for the privatisation of other electric utilities and for significant investment in the infrastructure of Karachi.