The Privatisation Commission says that the sales of two major power utilities – the Karachi Electric Supply Corporation (KESC) and the Faisalabad Electricity Board (FEB) – are expected to be completed in the first quarter of 1997. Bids are to be invited before the end of 1996.
KESC is a vertically integrated utility with power capacity of 1,700 MW, serving Karachi and the surrounding areas. The financial adviser is the UK’s NatWest Markets. The government plans to sell a 26 per cent stake in the corporation.
FEB is a distribution company, currently part of the Water & Power Development Authority (WAPDA). FEB has 1.3 million customers and power consumption of 1,000 MW. The International Finance Corporation has been appointed financial adviser. The government is currently planning to sell a 26 per cent stake in the utility, although the Privatisation Commission says a 51 per cent stake is likely to be offered.
In both cases, the successful bidder will be responsible for billing and collection. The government, in conjunction with the financial advisers, is currently considering the issues of a regulatory framework, powers in the event of non-payment and the interaction of the privatised entities with government and municipal services. Decisions on these issues are expected before the end of July, allowing the privatisation process to move forward