ISLAMABAD (June 21 2007): The Privatisation Commission and qualified parties/consortiums' representatives on Wednesday failed to reach any understanding on some key legal and financial issues here, making it next to impossible for the government to hold bidding for Pakistan State Oil (PSO) before the end of July or start of August.

The government was in the top gear to complete PSO bidding before the closing of the current fiscal year and the Privatisation Commission team, headed by minister, Zahid Hamid, expressed its desire for early bidding for PSO. He assured the participants of the pre-bid meeting that the government would make sure that the transaction completes in open and fair environment.

They were told that the ministry of finance will give an undertaking, ensuring bidders of picking-up PSO's liabilities and timely clearance of outstanding errors.

But nothing worked in favour of the Privatisation Commission as in total disagreement with the official team the representatives of qualified parties termed due diligence as incomplete.

Majority of the participants accused the Privatisation Commission of not providing them requisite information to see a clear picture of PSO. More than one participant questioned the Privatisation Commission officials' behaviour and asked the minister that he needs to spare some time to look into their complaints.

They said that none of them could come across the table for bidding if they were not provided requisite information. They unanimously demanded 30 days from the date of completion of due diligence.

The participants also wanted a clear policy on licensing issue. They criticised the Oil and Gas Regulatory Authority (OGRA) role saying even after one year now after taking over the licensing authority it was yet to come up with a new policy. They demanded a clear policy from OGRA on licensing for oil marketing companies prior to PSO bidding.

It was a general sense among the participants that absence of licensing policy was one of big hurdles in making PSO bidding possible. The minister had nothing in response to the queries at the end, but to say the participants that on extension in time and other issues they will be informed shortly.

However, as usual, the Privatisation Commission issued a handout of the pre-bid meeting which only gave a long tale narrated by the minister. The tale paints a rosy picture of the privatisation programme.

It said Zahid Hamid appreciated pre-qualified parties for showing interest in PSO procurement and assured them that all issues pertaining to the transaction would be resolved expeditiously and bidding would be held in consultation with them. It added that the minister agreed that Privatisation Commission will soon announce final date for PSO bidding.

Copyright Business Recorder, 2007