REQUEST FOR EXPRESSIONS OF INTEREST
(CONSULTING SERVICES – INDIVIDUAL CONSULTANT SELECTION)
Uzbekistan
Institutional Capacity Building Project
Credit No.: IDA 6431-UZ
Assignment Title: Selection of a Resident Privatization Advisor in the Republic of Uzbekistan.
Reference No.: MOF-PRIVATIZATION-ASAM-CS-INDV
The Ministry of Finance of the Republic of Uzbekistan has received financing from the World Bank toward the cost of the Institutional Capacity Building Project and intends to apply part of the proceeds for consulting services on behalf of the Agency of State Assets Management of the Republic of Uzbekistan.
The consulting services (“the Services”) include assistance in carrying out fair, efficient and transparent privatization by applying good international practices for the Agency of State Assets Management of the Republic of Uzbekistan, implementation period up to 18 months, ensuring full consistency with the Terms of Reference (TOR) attached in this REOI.
The detailed TOR for the assignment could be found at following source: www.mf.uz, https://www.linkedin.com/in/piu-icb-project-570420199/.
The Ministry of Finance of the Republic of Uzbekistan now invites eligible Individual Consultants (“Consultants”) to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services (reference to similar services, experience in similar assignments, availability, etc.) submitting directly to the piu_mof@mail.ru.
The shortlisting criteria are:
- A solid understanding of financial, business, and legal issues in the privatization of SOEs as confirmed by respective references from prior jobs;
- At least 10 years of relevant experience. Hands-on privatization experience in a country that implemented a mass privatization program will be considered a strong advantage;
- Advanced degree in economics, law, technical sciences or related;
- Proposed methodology of implementation of the upcoming assignment;
- Knowledge of English and Russian.
The attention of interested Consultants is drawn to Section III of the World Bank’s “Procurement Regulations for IPF Borrowers” July 2016 (“Procurement Regulations”), setting forth the World Bank’s policy on conflict of interest. In addition, please refer to the following specific information on conflict of interest related to this assignment: Consultants shall not be hired for any assignment that would be in conflict with their prior or current obligations to other clients, or that may place them in a position of being unable to carry out the assignment in the best interests of the Ministry of Finance and the Agency of State Assets Management of the Republic of Uzbekistan.
Further information can be obtained at the address below during office hours from 9:00 a.m. to 18:00 p.m. Tashkent time.
Expressions of interest must be delivered in a written form in English or Russian languages to the address below (in person, or by mail, or by e-mail) by 5th March, 2021.
Project Implementation Unit under the
Ministry of Finance of the Republic of Uzbekistan
Attn: Foziljon Kalandarov, Manager of the Project
Uzbekistan, 100017, Tashkent city, 29, Istiklol St.
Tel: +998907380050
E-mail: piu_mof@mail.ru
TERMS OF REFERENCE
for the selection of a Resident Privatization Advisor in the Republic of Uzbekistan
1. Background information:
The Government of Uzbekistan (GoU) has set as one of its goals to significantly reduce the degree of state presence in the economy, by using privatization as one of the main tools for achieving this objective. The Uzbek economy is dominated by state presence across all sectors. State-owned enterprises (SOEs) and enterprises with a predominant share of the state in the economy of Uzbekistan dominate and have a significant impact on the functioning of most sectors of the economy, including the extraction of natural resources, energy, manufacturing, telecommunications, banking and transport. The estimates are that SOEs generate approximately 50 percent[I] of the country's GDP, even more, and SOEs play a particularly important role in the structure of exports and imports of the country.
The legal framework for privatization is fragmented and outdated. The Law on Denationalization and Privatization, which regulates the privatization process in Uzbekistan was approved in 1991. There are also several subsequent additional government decrees regulating specific aspects of privatization. The Decree of the President of the Republic of Uzbekistan dated February 7, 2017 "On an action strategy for the further development of Uzbekistan" emphasizes the need to further expand and simplify the privatization of state property and reducing state participation in enterprises.
The authorized body for managing state assets is the State Assets Management Agency (hereinafter referred to as the Agency), established (reorganized) in accordance with the Decree of the President of the Republic of Uzbekistan dated January 14, 2019, № PD-5630. Among other tasks related to managing state assets and introducing good corporate governance practices in SOEs, the Agency also has the task to ensure an open and transparent mechanism for the sale (privatization) of state assets.
The Government aims to conduct privatization processes in accordance with international good practice. To provide for a sound legal framework for this process, the intention is to move towards consolidating the existing fragmented provisions into a single privatization law, to foster legal certainty of potential investors as well as other key stakeholders in this process.
In recent years, although there has been little progress in the sale of state property to the private sector, the main transactions are concluded on real estate and vacant facilities, which averages 75-80 percent of the total number of privatized objects. In fact, the largest enterprises still operate in state ownership, although with the nominal name "joint-stock company". There is also room for improvement of the legislation, as in Uzbekistan there is an interpretation according to which all business entities, with the exception of the legal form "state unitary enterprises", refer to private business, including "joint-stock company" or "limited liability company", despite the fact that they appeared as a result of the reorganization of the former state enterprises, and in their authorized capital there is a predominant share of the state.
On the whole, the history of privatization and the unsuccessful practice of privatization is based not only on general difficulties in the economy and low investment attractiveness of SOEs but also on the insufficient organization of work with investors, especially with foreign ones. Not perfect legislation and complicated methods of privatization are also one of the possible reasons for the slow and long term ongoing privatization.
The Agency and Uzbekistan as a whole have no practice in selling large state-owned companies. It is necessary to increase the Agency's potential in attracting consultants in the privatization processes, analyzing specific industries and markets, and negotiating with potential buyers.
The implementation of "landmark" transactions on the privatization of big state assets as an example is very important.
2. Objectives
The Agency is looking to engage a Resident Privatization Advisor to assist the Agency and GoU in carrying out fair, efficient and transparent privatization by applying good international practices.
To achieve this goal, the GoU, represented by the Agency, emphasizes the need and important role of proper pre-privatization steps to be taken in SOEs.
Resident Privatization Advisor should pay special attention to the tasks that are specified in the Decree of the President of the Republic of Uzbekistan "On measures to accelerate the reform of enterprises with the state share and the privatization of state assets", dated October 27, 2020, # PD-6096. This Decree refers to specific lists of SOEs, that are subject for transformation, for privatization with pre-sale steps and to be sold in open auctions. It is expected that the consultant will take concrete measures with Agency's responsible departments in order to achieve the best results on increasing the efficiency of SOEs and privatization.
The Agency's plan on successful privatization of at least 20-25 big assets and to attract world-known investors should be fulfilled during the following 1-2 years together with the Adviser.
3. Scope of Work
The key responsibilities of the Resident Privatization Advisor include:
- Conducting an ongoing review of regulations and administrative procedures regulating the privatization process of SOEs and provide comments and suggestions on improving legislation at least once a quarter based on a constant study of the process;
- Developing a detailed action plan that will guide the Agency and other stakeholder institutions in the implementation of a comprehensive privatization program;
- Providing technical input into the drafting of any privatization strategic documents, advise and help with the drafting of any other legal instruments necessary for successful implementation of the privatization program;
- Conducting institutional building, in particular on-the-job training of the Agency, to build capacity to implement the privatization program, including on topics such as the establishment of the framework for privatization methods (e.g.tender/auction process) based on internationally recognized practice and techniques, administering the privatization methods, investment negotiations, quality management and project management systems for the privatization methods applied;
- Providing proposals to strengthen the role and empowerment of the Agency on privatization issues;
- Advising and taking practical steps on organizing cooperation with investors, including institutional ones, IFIs and foreign partners on privatization issues;
- Conducting any other activities to help the Agency in the day to day implementation of the privatization program.
4. Deliverables
The Resident Privatization Advisor advises the Agency, the director of the Agency and the responsible departments on issues related to effective privatization. The Resident Privatization Advisor will submit to the Agency the following deliverables:
1. Monthly progress reports outlining the work performed for the different tasks during each month – no later than 5 days after the end of each calendar month during the period of services;
2. A final report of the activities undertaken under this TOR in a format acceptable for the Agency, no later than 1 month after completion of services.
All plans/reports must be written in Russian (or/and in English).
5. Qualifications
- A solid understanding of financial, business, and legal issues in the privatization of SOEs as confirmed by respective references from prior jobs; (15 scores)
- At least 10 years of relevant experience. Hands-on privatization experience in a country that implemented a mass privatization program will be considered a strong advantage; (30 scores)
- Advanced degree in economics, law, technical sciences or related; (20 scores)
- Proposed methodology of implementation of the upcoming assignment; (20 scores)
- Knowledge of English and Russian. (15 scores)
5. Duration of the contract
The duration of the contract equals 18 months starting from the effective date of the contract.
Working time/days will be organized for the staff of the Agency.
Travel time to or from the homeland of the Resident Privatization Advisor will not be considered/included as working days.
6. Resources provided by the Agency
The Agency will secure adequate office space for the Adviser with needed office equipment.
The Agency will ensure efficient communication and interaction of the Adviser with the relevant state agencies necessary for performing the tasks from this ToR.
The Agency will secure the appropriate office space and technical equipment for seminars and meetings with managers and specialists of the state agencies within the framework of the performance of the tasks from this ToR.
7. Service Financing Terms
The conditions and details of payment for services, expenditures related to house rent are ruled by the specific articles of the contract concluded between the consultant and the Ministry of Finance.
The payments under the contract will be made against the submission of monthly progress reports.
Sources of financing services may be funds of international financial institutions.
At the same time, the consultant is accountable to the Agency and reports to it in accordance with the Work Plan by submitting acts of work performed. The relationship of consultants and the Agency with the Project Implementation Unit (PIU) under the Ministry of Finance is carried out in the prescribed manner through the Agency.
[I] World Bank Staff Estimation. Statistics Committee data states GDP contribution at 19%, which is significantly understated due to data limitations and classification of SOEs as entities with 100% state ownership. Statistical data collection classifies all entities with less than 100% state ownership or ownership by several state entities as private.