Apropos a news item published in the Express Tribune dated July 12, 2015 regarding privatisation of Pakistan Steel Mills (PSM), wherein the correct factual position has not been reported.

The factual position is that M/s Pak China Investment Bank has not been awarded the financial consultancy contract on a sole bid basis. 02 parties participated in the process. While the consortium of NCBMS was disqualified in the technical evaluation, M/s Pak China Investment Bank qualified the same and was eventually awarded the contract. However, for the sake of clarification, under clause 6(1) of the PPRA rules, 2010, awarding a contract to a sole bidder is also permissible.

It is also clarified that the NCBMS–led consortium attained 68 marks only after taking the aggregate of all 08 Evaluation Committee members’ independent score.The Evaluation Committee,which included representative of Ministry of Industries & production, Finance Division along with CEO PSM, 02 PC Board members and 03 members from the Privatisation Commission (PC) including Director General, Consultant and the Transaction Manager, independently gave score to the consortium and the aggregate of these scores was 68 which resulted in the disqualification of the NCBMS–led consortium, as to qualify a firm has to obtain at least 70 marks in technical evaluation.

It may kindly be noted that each member of the Evaluation Committee does the technical scoring under certain indicators which have already been shared with the interested parties (IP) in the RFP package. Once the technical proposals are received from the interested parties, the same are circulated to the members of the Evaluation Committee for review and scoring. Each member of the evaluation committee then gives a score, which is based on his perception of the firm. It may also be noted that the most of the scoring is done on the basis of the Technical Proposal, already submitted by the IP. Hence, whether the member is linked through video/audio conference or is physically present during the presentation, is irrelevant as the member has already gone through the credentials of the consortium. Furthermore, the presentation of the consortium is also shared with the member, who is present through the video/audio link. In the instant case, Mr. Zafar Sobani attended through the audio link.

During the presentation, the Privatisation Commission requires that the lead consortium introduces itself along with its sub-contractors to the members of the Evaluation Committee. The basic idea of the presentation is to question the interested parties in case any further clarity is required. In the instant case, the consortium of NCBMS failed to bring along sub-contractors, representing the HR and the valuation firm.

With regards to the fee, it has again been reported wrongly and highly exaggerated that the minimum fee charged for the consultancy by Pak China would be Rs 444.1 million.

The fact that M/s Pak China Investment Bank has been awarded the consultancy during its second attempt speaks of the high standards of transparency, which are being ensured in the Privatisation Commission. Previously, M/s Pak China had different sub-contractors including ‘VO’ Tyazhpromexport and RIAA, which could not satisfy the members of the Evaluation Committee and, hence, the consortium led by M/s Pak China was disqualified. It may be noted that while M/s Pak China re-grouped and formed a world class consortium, M/s NCBMS connected with the same sub-contractors which were part of the previous failed attempt of M/s Pak China.

It needs to be noted that PC uploads evaluation reports on PPRA & PC websites at least 10 days before signing the Financial Advisory Services Agreement. This time is given to enable any aggrieved party to file their objections if any. In no case so far has any participating party filed any objections against PC’s decision of award of contract, either with PC or PPRA. This in itself is a testimony to the integrity of the PC run process.

Lastly, the report that HEC was sold at Rs 250 is factually incorrect. Pursuant to the recommendations of the PC Board and in light of the M/s Deloitte Valuation Report, the Cabinet Committee on the Privatisation (CCoP) approved the sale of HEC for a total sale price of Rs 1095 million, inclusive of cash payment, transfer of bank liabilities, surrendering of ‘Deferred Tax’ and ‘Sales Tax Refund’ rights on March 26, 2015.

The Privatisation Commission remains fully committed to ensure the highest standards of integrity and transparency in conducting all its transactions.