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ISLAMABAD: The government has decided to amend the Privatisation Commission (Hiring of Financial Advisers) Regulations 2018 aimed at expediting sell off process on fast-track basis, sources close to Secretary Privatisation Commission told Business Recorder.

Sharing the details, sources said, in a meeting chaired by the Federal Minister for Finance and Revenue on May 7, 2022, the then Deputy Chairman Planning Commission presented a proposal for swift transaction of assets of the Federal Government through Privatisation Commission. Considering extreme financial urgency in the country, the Finance Minister directed PC to consult different stakeholders and explore options for fast-track hiring of financial/ transaction advisers.

The sources said, in line with the directions of the Federal Minister, a meeting with the stakeholders was accordingly held on May 9, 2022 in PC to deliberate upon various options to achieve the purpose highlighted in the meeting dated May 7, 2022. The stakeholders (Law Division, Finance Division, Planning Division, EAD and PPRA) agreed in principle to proceed with the fast-track hiring of financial/ transaction advisers and made recommendations for such hiring through least cost or qualification/cost selection method, under framework agreement of EAD and negotiated tendering (without publication of advertisement) due to extreme urgency to be declared by the Cabinet Committee on Privatisation (CCoP).

According to sources, a meeting with the Prime Minister, Shahbaz Sharif, was also held on June 08, 2022, attended by various Ministers and other stakeholders, wherein it was, directed that “Privatisation Commission shall make necessary improvement in the relevant rules for expediting the process for hiring of Financial Advisors. PC may also consider introducing enabling provision for having Financial Advisors on its panel.”

The meeting also decided that PC shall proceed with the privatisation of public sector entities/SoEs in accordance with the procedure prescribed in Privatisation Ordinance, 2000 read with Privatisation (amendment) Act 2021 on a fast track basis.

Privatisation Commission shall present the details of Services Hotel transaction to the next meeting of Cabinet Committee on Privatisation (CCoP) for its review.

The proposal for amendments in the Privatisation Commission (Hiring of Financial Advisers) Regulations 2018 has the following objectives: (i) swift hiring of Financial Advisors and Valuers; (ii) provision of options to the Board for taking decision for fast-tracking hiring of financial advisers; and (iii) Panel of Financial Advisors.

The sources maintained that existing regulations do not provide flexibility and options to the Board for swift hiring of the services of the financial advisers. Panel of Financial Advisers is also restricted to offshore listing of shares. Legally available option of direct publication of request for proposals package has been proposed to be added to reduce time in the competitive hiring process of the financial advisers. In case of the panel, CCoP will decide the urgency brought about by events unforeseeable by PC before the Board selects a panel from amongst the international league tables.

PC Board, sources said, has also been allowed to use alternate methods of procurement of services of the financial advisers under commitment of the Federal Government or may seek exemption from procurement processes and procedures. PPRA has also been consulted before finalizing the draft amendments.

The PPRA further stated that floating Expression of Interest (EoI) prior to floating of Request for Proposal (RFP) is better option to eliminating non-serious/ incapable firms from the competition. However, if the procuring agency is convinced based on its knowledge according to the practices of that particular trade that the probability of participation for non-serious bidder(s) consultants in negligible, the procuring agency may directly float the RFP.

Although the Regulation 3 titled as “method for selection for Consultants” of the “Consultancy Services Regulations 2010” requires floating EoI prior to floating the RPF; however, Regulation -8 of the same Regulations provides space for direct floating of RFP.

The proposed new amendment about listing of shares in any offshore jurisdiction says: (i)The Cabinet Committee on Privatisation may direct the Commission to appoint a panel of interested parties by issuing the request for proposals package directly to the interested parties in the panel due to any extreme urgency brought about by events unforeseeable by the Commission; (ii) after the issuance of direction of the Cabinet Committee on Privatisation under this regulation, the Board shall approve the internationally recognized and published league table based on the skill set required for the transaction and determine the number of interested parties in the league table in order of merit as a panel to whom the Commission shall issue the request for proposals package; (iii) Chairman shall follow the Board decision and approve the issuance of the request for proposals package to the parties in the panel;(iv) the e Commission shall follow the process of evaluation and appointment of the financial adviser under these regulations;(v) In the event no interested party qualifies or shows interest, the Board may authorize issuance of request for proposals package to the next set of parties in the order of merit of the same league table as used before; and (vi) the Chairman may approve changes in the request for proposal package to be issued to the new panel.

Commenting on listing of shares in any offshore jurisdiction, PPRA has proposed that the following sentence may be added in clause (1) “the circumstances invoked to justify extreme urgency must not be attributed to the Ministry of Privatisation and Privatisation Commission”. Moreover, the Ministry may consider to invoke the option of closed framework agreement with defined number of entities to be privatised wherein the agreement may be signed with the already defined number of consultants against the agreed prices and terms and conditions for the period of not more than 3-years, in accordance with their expertise for particular nature of transactions. Consequently, the Commission may call them for signing the contracts for respective category of the transactions, as per the future requirements, and expertise of the respective consultants (with whom agreements were signed).

However, some experts on condition of anonymity are of the view that PC is now opening floodgate of non- transparent procurements, being encouraged by directions of FM and PM for procuring high contract value procurement of services without publication of advertisements.

“PC is laying foundations of most likely being questioned for procurements by spacing mode of procurement of big tag amount of services without competitive bidding,” said one of the experts, adding that exercise of discretion has been opened in regulations for hiring of expensive services by creating a Panel of Companies for negotiating contracts, who will be notified by restricted beneficiaries to be invited to access award of uncapped value contracts, excluding the competition base to value the supply of money in transparent manner.

Copyright Business Recorder, 2022

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