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 Advisor on the transformation of state-owned enterprises and preparing them for privatization in the Republic of Uzbekistan for the State Assets Management Agency.
Reference No.: UZ-TRANSFORMATION-SOE-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 the transformation of SOEs into effective companies and ensuring a fair, efficient and transparent privatization program 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 Advisor on the transformation of state-owned enterprises and preparing them for privatization in the Republic of Uzbekistan
- 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 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 managing SOEs and preparing for privatization is fragmented and outdated. The management system of SOEs is not centralized and responsibility for the results of SOEs between the Executive Board and Supervisory Board is not clearly defined and not delineated. The Law on Denationalization and Privatization, which regulates the privatization process in Uzbekistan was approved in 1991 and doesn’t include SOEs transformation issues.
The authorized body for managing state property 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. Recently adopted Decree of the President of the Republic of Uzbekistan “On measures to accelerate the reform of enterprises with the participation of the state and the privatization of state assets”, dated October 27, 2020, # PD-6096, sets for the Agency the task of increasing efficiency of SOEs, the results of which should be successful privatization of SOEs.
The Agency has no enough experience in transforming SOEs into effective operating business entities. Although there are some actions on the reorganization of some SOEs, including large ones, introducing modern management methods, selling their non-core assets, they are not sufficient to ensure their activity in an effective way.
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.
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 transformation and preprivatization processes, analyzing specific industries and markets, and negotiating with potential buyers.
1. Objectives
The Agency is looking to engage a Resident Advisor on the transformation of SOEs and preparing for privatization to assist the Agency and the government of Uzbekistan in carrying out the transformation of SOEs into effective companies and ensuring a fair, efficient and transparent privatization program by applying good international practices.
Also, in accordance with the Decree of the President of the Republic of Uzbekistan “On measures to accelerate the reform of enterprises with the participation of the state and the privatization of state assets”, dated October 27, 2020, PD-6096, specific tasks were set for the privatization and transformation of state assets.
During the year, the Agency needs to take practical steps on increasing the attractiveness of SOEs, which should be subject to privatization. It requires to obtain foreign experience and best practices on managing SOEs.
2. Scope of Work
The Advisor will assist the Agency and other relevant authorities in the transformation and preparation for the privatization of selected large SOEs. More specifically, the key responsibilities of the Advisor will include:
- Developing a roster of financial advisers, drafting RFPs and ToRs, providing recommendations during contract negotiations;
- Revising the existing system of governing SOEs, the role of Agency as state authorized body and shareholder, to prepare ideas on the perfection of this system;
- Strengthening the power of the Agency on SOEs management on the basis of analyzing its needs and mandates;
- Advising the Agency on the choice of applied privatization methods in relation to specific SOEs, introduce the practice of analyzing sectors of the economy, market segments and privatized enterprises;
- Advising the Agency in the transparent selection of reputable specialists (financial advisors) for transformation and privatization in a competitive manner;
- Advising the Agency on internationally recognized practice and techniques for organizing the privatization tender process;
- Supporting the selected privatization specialists’ efforts to prepare the companies for efficient privatization and development of the methods and terms of sale, organizing privatization tenders;
- Conducting institutional building, in particular on-the-job training of the Agency, to build capacity to implement the privatization program, including training on effective managing state assets, privatization methods and techniques, principles of enterprise valuation, negotiations;
- Participating in meetings with other stakeholder institutions (Ministry of Finance, Ministry of Labor) and companies to be privatized, relevant to the implementation of the privatization program;
- Conducting any other activities to help the Agency in the day to day implementation of the privatization program.
3. Deliverables
The consultant advises the Agency, the director of the Agency and the responsible departments on issues related to effective privatization. The Consultant 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).
4. 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 Advisor on the transformation of SOEs and preparing them for privatization shall 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.