ISLAMABAD - The timeframe for unbundling Sui gas companies is unrealistic and new five gas companies will not be able to meet their operational deadline of December 2018.

In the Expression of Interest (EOI) document, it is mentioned that transaction to be done in six months but due to upcoming elections and volume of work it is unlikely that the process will be completed during the required time, said the potential Transaction Adviser Firms said in their queries regarding prequalification of transaction adviser on un-bundling of Sui companies, sources informed The Nation on Sunday.

Appointment of transaction adviser, to carry out the unbundling of Sui companies, has been approved by the Board of Directors of both the gas companies as per the draft policy decision issued in this respect.

Ogra has agreed to allow the cost of this exercise as part of each company's revenue requirement.

Under the gas sector reforms, assisted by the World Bank, the government is planning unbundle the two gas utilities of Sui Northern Gas Pipelines and Sui Southern Gas Company Limited into four gas distribution companies and one gas transmission company.

Under the plan, the federal government wants to hand over the control of gas distribution companies to the provinces but will keep the gas transmission company within the Centre's control.

The World Bank is currently assisting the government on introduction of reforms in gas sector.

In response to the EOI, the proposed bidders have sent their queries and reservations to SSGCL. One of the proposed bidder said that "the project completion (New entities to start operations) timeline of December 2018 is very tight in view of very wide ranging scope of the assignment and is unlikely to be met keeping in view that it will take at least few months to award the contract to Transaction Advisers(TA) and elections in mid 2018.Therefore the transaction timeline of six months seems unrealistic.

Another bidder said that cut-off date mentioned in Request For Proposal (RFP) is not practical as there will be multiple approvals involved in the process and if there is some litigation than the transaction can't meet the deadline.

The proposed Transaction Advisors further said that seeing the scope of work especially from the HR perspective the timeline needs to be reviewed.

"We Understand that it is uphill task but the timeline have been given by ministry and we cannot change the timeline and if there were some litigation issue in the due process then it is separate matter and the timeline will be adjusted accordingly but the additional date that need to follow is December 2018" responded by Sui Company.

The company further responded that government of Pakistan is very serious about this initiative and they have given this deadline of six months and will not be changed."As per the directions we received from the Ministry of Energy (Petroleum Division) is quite clear and work needs to be completed till 31st December" said the reply of the gas utilized to the bidders. "whatever the resources are required that needs to be engaged by the bidder and the cost should be included in the bid"

The cost that bidders are incurring to complete the transaction in such tight scheduled should be included in the bid, said the documents. The bidders can mention their suitable timeline to complete the project but disqualification risk will remain at bidder's side, if one of the bidders agrees to complete the work in six months, it was further responded.

The bidders were informed that the accounts of both SNGPL and SSGCL have made their data rooms which will be shared with the firm. Similarly account segregation has already been done and will be shared with qualified bidder.

Another question raised by the bidder that this whole process requires some back end legislation whether it is being completed or not? If not done then how this will be done and that also to be synchronized.

The gas utility companies responded that legislation with Ogra and World Bank is in process .Consultant has not to worry about this as they don't have to write law, however whatever the law to be invoked at that time will be applicable, the Sui company responded.