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Kathmandu Thursday December 06, 2001 Marga 21, 2058.
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IPC, Interkraft submit bids for BPC
Post Report
KATHMANDU, Dec5 - With
the expiry of the once extended deadline Wednesday for the third tender call for the
privatisation of 75 per cent shares of Butwal Power Company (BPC), only Interkraft (AAS)
and Independent Power Corporation (IPC-Nepal) have submitted their bids, bringing the same
old rivals back once again into the battle ground.
Responding to the third
tender call for the privatisation of the BPC, six companies, including Interkraft (AAS), a
consortium of Joyti Group along with other Nepali investors and Norwegian Power Developer,
and IPC Nepal, another rivalry consortium led by Choudhary Group in participation of IPC -
an American British Power Developer, had obtained application froms.
According to an
official at the Privatization Cell of Ministry of Finance, the technical bid of the
bidders, as announced in the tender call notice, would have been opened on Thursday.
However, as per the changed modality, only the technical bid of IPC-Nepal would be
evaluated tomorrow.
In the tender call
notice, it was stated that the company whose technical bid was approved during the last
round of bidding would not need to submit another technical bid and would be allowed to
participate directly on the financial bidding.
During the second round
of bidding, the technical bid of the Choudhary group was cancelled on technical grounds,
thereby, barring it from competing in the financial bidding. Interkraft had remained alone
at the financial bidding
After two rounds of
failed-attempt to hand-over BPC to the private hands, the government this time had changed
some modalities and procedures of the tender call to make the whole privatization process
more transparent and to correct the past mistakes. Unlike, the past tender calls, the
bidding parties were asked to submit both the technical and financial bids together,
albeit in separate envelopes.
Like the past
procedures, the bidding companies will be allowed to participate in the financial bidding
only after the technical bidding of the companies are passed by a committee.
As per the plan, the
technical bids of the competing parties would be opened on the next day of expiry of the
deadline to submit the tenders and it would be thoroughly examined by a technical
committee headed by the Secretary at the Ministry for Water Resources. The committee than
will submit its report to the Finance Minister who will then form another committee to
evaluate the financial bids of the vying companies.
Earlier, the meeting of
the privatization committee held on September 10 had decided to cancel all second round of
privatization process on the grounds that there were some serious technical mistakes in
the financial bid submitted by the Interkraft, a Norwegian power developer along with its
Nepali partners. Interkraft, in its financial bid had quoted Rs 735 million for the
purchase of the shares of the BPC.
The government in
December 1999 had, amid mounting controversies, scrapped the first call of the
privatization process only to recall the second round of tenders on September 2000. The
first call was cancelled following the revocation of the bid by IPC alleging the Minister
of Finance of favoring Interkraft, the only rival of IPC.
The three and half year
old privatization process has bleached the government’s commitments towards speeding
the privatization of the state-owned enterprises, an important part of the financial
sector reforms. This slow-pace privatization process has also irritated the donor agencies
and some of them have even openly said that the future financial assistance to Nepal can
be affected if the government fails to accelerate the privatization process.
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