Timing of TPSA share sale thrown into doubt by ruling
The Treasury Ministry will now have to review the tender for the advisory mandate, which could stall the sale of 25-35% of TPSA to a strategic investor. It is not clear, though, if the delay would prevent the government from selling the stake this year.
The uncertainty arose when the arbitration committee of the Public Procurement Office agreed with an argument made by the Polish Institute of Management (PIM) that the Treasury Ministry has to repeat the adviser-selection process.
ăAfter the tender, we placed a protest with the Treasury Ministry, pointing out that the selection process broke the provisions of the public procurement law,O said Elěbieta Naumienko, deputy president of PIM. Although the complaint was dismissed by the ministry, PIM appealed to the Procurement Office.
Naumienko refused to comment further on the ruling, saying that PIM is still waiting for a written version of the decision. PIM lost out on the advisory work when the ministry in early April awarded the mandate to ING Barings and Nicom Consulting.
ING and Nicom outdistanced such competitors as Merrill Lynch, Schroders, which was the adviser for TPSA's initial public offering (IPO) in November 1998, and a consortium of J.P. Morgan with Business Management & Finance (BMF).
It is not clear if the decision will force the ministry to call a new tender, or review the bids that were submitted in the first one.
And observers were divided on whether a new tender would push the TPSA share sale into 2000. ăThat's the biggest problem now,O said Henryka Bochniarz, president of Nicom Consulting. ăA new tender for the privatization adviser would make the privatization impossible this year.O
Others were more sanguine, saying that regardless of what the ministry does, the share sale could go ahead with only slight delays. ăEven if a new tender is called, I don't think this would delay the sale for longer than four to six weeks,O said Michal Dobak, deputy president of Credit Suisse First Boston, which had bid for the advisory role.
The fear of extensive delays is that it would deprive the government of needed privatization revenue. This in turn could exacerbate financing problems related to the introduction of social reforms this year.
ăThe revenues from privatization are important not from the point of view of the budget deficit, but of the health and pension reforms, which are meant to be financed with that money,O said economist Cezary J_zefiak of the Adam Smith Research Centre and a member of the Monetary Policy Council (RPP).
But Krzysztof Bl®dowski, chief strategist at Wood &Co., said the government should be able to realize its relatively ămodestO goal of zl. 15 billion ($3.8 billion) in privatization revenue it is planning on even without TPSA, which was expected to garner zl. 3 billion ($750 million).
The uncertainty arose when the arbitration committee of the Public Procurement Office agreed with an argument made by the Polish Institute of Management (PIM) that the Treasury Ministry has to repeat the adviser-selection process.
ăAfter the tender, we placed a protest with the Treasury Ministry, pointing out that the selection process broke the provisions of the public procurement law,O said Elěbieta Naumienko, deputy president of PIM. Although the complaint was dismissed by the ministry, PIM appealed to the Procurement Office.
Naumienko refused to comment further on the ruling, saying that PIM is still waiting for a written version of the decision. PIM lost out on the advisory work when the ministry in early April awarded the mandate to ING Barings and Nicom Consulting.
ING and Nicom outdistanced such competitors as Merrill Lynch, Schroders, which was the adviser for TPSA's initial public offering (IPO) in November 1998, and a consortium of J.P. Morgan with Business Management & Finance (BMF).
It is not clear if the decision will force the ministry to call a new tender, or review the bids that were submitted in the first one.
And observers were divided on whether a new tender would push the TPSA share sale into 2000. ăThat's the biggest problem now,O said Henryka Bochniarz, president of Nicom Consulting. ăA new tender for the privatization adviser would make the privatization impossible this year.O
Others were more sanguine, saying that regardless of what the ministry does, the share sale could go ahead with only slight delays. ăEven if a new tender is called, I don't think this would delay the sale for longer than four to six weeks,O said Michal Dobak, deputy president of Credit Suisse First Boston, which had bid for the advisory role.
The fear of extensive delays is that it would deprive the government of needed privatization revenue. This in turn could exacerbate financing problems related to the introduction of social reforms this year.
ăThe revenues from privatization are important not from the point of view of the budget deficit, but of the health and pension reforms, which are meant to be financed with that money,O said economist Cezary J_zefiak of the Adam Smith Research Centre and a member of the Monetary Policy Council (RPP).
But Krzysztof Bl®dowski, chief strategist at Wood &Co., said the government should be able to realize its relatively ămodestO goal of zl. 15 billion ($3.8 billion) in privatization revenue it is planning on even without TPSA, which was expected to garner zl. 3 billion ($750 million).
