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Sunday, March 19, 2006

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HEADLINE
 
DESCO, PGCB shares to be offloaded by June
SM Jahangir and AZM Anas
3/19/2006
 

          The government is pressing forward with its plan to make available the shares of two state-run power entities for public subscription shortly.
The Power Division has taken the initiative to expedite the process of offloading 25 per cent stakes of the Dhaka Electric Supply Company (DESCO) and the Power Grid Company of Bangladesh (PGCB) each by the end of June.
The initiative is a part of the government's broader goal of giving all the power generation, supply and transmission entities a corporate shape. Already, the process of corporatising the Power Development Board (PDB) has taken off.
With that in mind, the Power Division sits tomorrow (Monday) with all the government agencies concerned to devise necessary modalities and strategies for the purpose.
The meeting is also expected to issue directives to the relevant authorities to complete all formalities, including the evaluation of assets and liabilities of the two power entities -- the DESCO and the PGCB.
To be chaired by the State Minister for Power Iqbal Hasan Mahmud, the meeting will be attended by senior officials from the Ministry of Finance, the Securities and Exchange Commission (SEC), the Investment Corporation of Bangladesh (ICB), the Dhaka Stock Exchange (DSE), the PGCB and the DESCO, official sources confirmed.
The Power Division has convened the meeting following a directive issued by Prime Minister (PM) Khaleda Zia at a recent review meeting on the power sector, which is now in dire straits.
In her directive, the PM, who is also in-charge of the Ministry of Power, Energy and Mineral Resources, asked the Finance Ministry to speed up the share offloading process.
The government wants to shed the shares of the DESCO and the PGCB before the end of its present tenure in the light of power sector reform programme.
The move aims to make the state-run electricity agencies operationally sound and commercially viable.
It is also expected to enhance the managerial responsibility and accountability of the companies.
One of the key objectives of the plan is to restore the investors' confidence. This would ultimately help make the country's share market more vibrant, the policy planners feel.
Earlier, the government took a decision to off-load a part of the shares of the two government agencies through capital market.
An inter-ministerial meeting, chaired by the finance minister, had already approved the proposal.
Although the Power Division intends to complete the procedures by June next, sources said it may not be possible on the part of the government to do so because of the technical complexities.
"Offloading of the shares will take six to seven months as assets valuation of the companies is yet be completed," a Power Division official told the FE.
The PGCB is engaged in the transmission of power around the country while the DESCO is responsible for supplying electricity in the city's Gulshan, Mirpur, and Uttara zones.

 

 
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