The consultant will play a vital role in finding a strategic partner by a due diligence audit (DDA) report of NT and documents for calling a tender.
The sub-committee, coordinated by Janma Jaya Remgi, chief of Privatisation committee of the Ministry of Finance, submitted the report to the NT Board on Thursday. “We have submitted the report and it is up to the NT board to approve or disapprove it,” said Regmi. “We have set a certain standard for the consultants to be hired for doing homework to bring in a strategic partner.”
A member of the sub-committee said interested consultants would need to have basic experience in strategic partnership studies and must have a local agent in Nepal. “We have set a tough criteria for the consultant and based on the experience and expertise of human resources of the consulting firm, ranking of the bidder will be made and the best will chosen,” he said.
Once NT calls the EoI after receiving the go-ahead from the board, it will take 45 days to receive applications from interested consulting firms. The committee member said the involvement of international consulting firms in the DDA and bidding is expected to attract more investors as the study would be more reliable. The state-owned company has been planning for last four years to bring in a partner by offering a 30 percent of stake amid cut-throat competition from private sector players like Ncell.
However, the work to this effect has moved at snail’s phase due to procedural delays and as it is an issue related to the best performing public enterprise. The government three months ago had allowed NT in principle to tie up with a competent international partner without mentioning the stake to be sold.
Based on a study carried out by a committee under the coordination of Baikuntha Aryal, joint secretary at the Finance Ministry, the prospective partner will have to invest Rs 30-40 billion to buy shares.
An official at the Communications Ministry said attracting a partner would be a tough job given the requirement of a huge investment. “The requirement to follow the Public Procurement Act will also make it challenging to bring in a strategic partner,” said a communication ministry official. The government has a 92 percent stake in the company.
With the issuance of unified licence to Smart Telecom and the government’s plan to give similar permits to United Telecom Limited and CG Communications, NT is all set to face a tougher competition. Studies have shown it will take at least two years to select a partner for NT.
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