Transcript IMC Meeting - Ministry of Finance

PRESENTATION
Infrastructure & Privatization
Inter-Ministerial Committee
Progress Report # 2
Beirut, Lebanon
July 5, 2007
This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
0
Today’s objective is to update your Excellencies on progress to-date,
endorse the Telecom and Power Sector Programs, discuss the
Ministry of Transport and CDR’s plans, and highlight key issues
Meeting Objectives
 Brief your Excellencies on the status of issues raised in the previous IMC and on progress todate of GR PCO planning and monitoring activities
– In the last IMC, 5 main issues were raised regarding the Power, Telecom and Transport
Sectors: To-date, 2 issues were resolved, 2 are in progress, and 1 is delayed (details in
appendix)
 Highlight progress and status in each sector (where available):
– Paris III Program Milestones (2007 and 2008)
– Short Term Technical Assistance Requirement
– Short Term Initiatives Implementation Progress and Issues
 Endorse the Telecom and Power Sector Programs
 Agree on the prioritization of the proposed Transport initiatives
 Discuss CDR engagement under Paris III
1
Progress To-date
The Paris III implementation planning process is generally on track –
Delays could occur in the Power and Transport sectors
Infrastructure & Privatization IMC Progress To-date
Identification Prioritization
Natural Owner
of Initiatives of Initiatives
Program
Charters
Development
Ministry of
Telecom
✓
✓
✓
HCP
✓
✓
✓
TRA
Ministry of
Energy and
Water / EDL
Ministry of
Transport
CDR
✓
✓
50%
✓
✓
✓
50%
50%
✓
KPIs
Setting
Natural
Owner
Review
✓
✓
Immediate Next Steps
 Develop KPIs
 Review and finalize Program Charters with
Minister of Telecom
 Develop KPIs
 Develop KPIs
 Develop program charters and detailed
workplans for short term initiatives
 Discuss privatization roadmap with Minister of
Transport and agree on short-list of initiatives
 Follow-up on procurement and public
investment programs
 Agree on prioritization of initiatives
 Develop program charters for short term
initiatives
2
Telecom Sector
A Telecom Sector Corporatization & Privatization plan, structured
along three main streams, has been endorsed by all stakeholders
Telecom Sector Corporatization/ Privatization – Program Milestones
2007 Milestones
2008 Milestones
1
Establish the
Telecom
Regulatory
Authority (TRA)
 TRA created and Board appointed
 Decrees to facilitate the operations of TRA
issued
 All regulatory functions transferred to TRA
 Liban Telecom established and Board or
alternate governance structure appointed
2
Corporatize
Liban Telecom
 Restructuring Program Management Office
(PMO) created
 Liban Telecom organization structure formalized
 Provisional opening balance setup, and Liban
Telecom budget transferred
 Business support systems and marketing plan
implemented
 Customers and vendors contracts migrated
 LT brand created and Web presence established
 Employees migrated to new organization
 Mobile License for Liban Telecom issued
 Liban Telecom officially launched
 Key regulations issued
3
Privatize Mobile
Sector
 Financial, technical, and legal due diligence
performed
 Auction rules and procedures for sale of assets /
licenses finalized
 License/ privatization auction launched
 Termination notice sent to existing operators
Note: Program Charters and initiatives in Appendix
3
Telecom Sector
However, progress is obstructed by a slow process in transferring
documentation to TRA, absence of a governance body for Liban
Telecom, and delays in finalizing legal opinion on asset transfer
Telecom Sector Corporatization/ Privatization – Short Term Initiatives Progress and Issues
Progress on Short Term Initiatives
1
Establish the
Telecom
Regulatory
Authority (TRA)
 TRA was established and Board appointed
 Decrees to facilitate TRA operations are being
issued
 TRA regulatory functions defined
Issues
 Need to speed-up the process in transferring
documentation and information (e.g., Radio
Frequency, Licensing, Authorizations, Studies)
from MoT to TRA
2
Corporatize
Liban Telecom
3
 Decree # 13944 establishing and capitalizing
Liban Telecom issued
 TRA issued 3 mobile telecom regulations (SMP,
Interconnection, and Consumer Affairs)
Privatize Mobile
Sector
 Valuation of licenses and legal due diligence in
progress
 Tendering for financial and technical due
diligence advisors in progress
 Legal opinion on ways to proceed with the
privatization of mobile telecom assets, based on
Privatization Law, sent to MoJ for review
 Need to appoint Liban Telecom Board of
Directors or alternative governance structure,
and to assign PMO Members
 Need to speed-up the process in finalizing
decision on the available options regarding
assets transfer (sale vs. lease) – Currently, legal
opinions developed by HCP’s and TRA’s
advisors, have been sent by the Minister of
Telecom to the Department of Legal
Administration at the Ministry of Justice for final
verdict
4
Telecom Sector
Once key issues are resolved, Telecom Sector Natural Owners will
need technical assistance support of around $3.3 million to
achieve short term milestones
Telecom Sector Corporatization & Privatization Short Term Technical Assistance Requirement
(Pre-November 2007)
Programs
Milestones
Budget Items
Amount
Total Budget
-
-
-
 TRA created and Board appointed
Establish the
 Decrees to facilitate the operations
Telecom
of TRA issued
Regulatory
 All regulatory functions transferred
Authority
to TRA
Corporatize
Liban
Telecom
 LT established and Board or
alternate governance structure
appointed
 PMO created
 LT organization structure created
 Provisional opening balance setup,
and LT budget transferred
 Mobile telecom regulations issued
 Valuation of licenses, and financial,
Privatize
technical, and legal due diligence
performed
Mobile Sector
 Auction rules and procedures for
sale of assets / licenses finalized
 Advisory support for
restructuring implementation
 $ TBD
 Auditing of LT – Auditor fees
 $ 1,000,000
$ 1,050,000
 Developing new brand for Liban
Telecom – PR consultants fees  $ 50,000
 Valuation of licenses – Advisory
fees
 Financial due diligence – Advisory
fees
 Technical due diligence – Advisory
fees
 Publication of RFA in international
and local newspapers
 Creation of virtual data room
 $ 600,000
 $ 250,000
 $ 600,000
$ 2,250,000
 $ 500,000
 $ 300,000
Note: All budgetary requirements should be reviewed and endorsed by the Ministry of Finance
5
Power Sector
A Power Sector Program, structured along three main streams, has
been endorsed by all stakeholders – This program is detailed in the
Appendix
Power Sector Program Milestones
2007 Milestones
2008 Milestones
1
Strengthen
Sector PolicyMaking Capacity
2
 IMC to oversee sector reform created
 National Control Center established
 Policy & Planning advisors to MoEW retained
 Master Plan & Public Investment Plan for
Generation and Transmission completed
 Electricity Sector Expenditure Review (World
Bank) completed
 Advisors to EDL appointed
Improve EDL
Operational
Efficiency
3
 Auditor for 05-06 accounts appointed
 Contract for the supervision of KEPCO awarded
 NG to Beddawi plant committed
 220kV grid rehabilitated
 Technical report on viability of Zouk and Jiyyeh
plants completed
 400kV Ksara substation expanded
 Consultant to HCP appointed
 EDL restructuring plan approved by CoM
 Energy Regulatory Authority created
Corporatize and
Privatize EDL
 EDL 2002-2006 accounts audited
 Power meters BOT contracted
 EDL Asset Register completed
 Additional capacity in Deir Ammar contracted
through IPP
Note: Detailed program (in Appendix) agreed by MoEW, EDL, MoF, HCP, and CDR
 EDL corporatized (unbundled into subsidiaries for
generation, transmission and distribution)
 EDL bylaws approved by CoM
 Management of distribution privatized
6
Power Sector
Preliminary issues have surfaced while implementing short term
initiatives
Power Sector Short Term Initiatives Progress and Issues
Progress on Short Term Initiatives
1
Strengthen
Sector PolicyMaking Capacity
2
Improve EDL
Operational
Efficiency
3
Issues
 Qualified advisors at the Ministry of Energy and
Water to support on strategic planning and
evaluation of electricity policy reforms selected
(contract negotiations currently underway)
 EDF hired and financed by AFD to develop a
Master Plan for power sector generation &
transmission
 Auditor appointed for EDL 2002-2006 financial
accounts – Auditors started working on 20022004 financial accounts
 Need to formalize KEPCO (BDL rejected EDL’s
request to open LC, which has been resent to
MoF)
 Consultancy team at EDL to perform operational,
financial, accounting, legal and contract
management activities selected (contract
negotiations currently underway)
 Need to hire supervision company for KEPCO
 Need to shift focus of auditors to EDL’s 20052006 accounts (or have them work in parallel on
2002-2004 and 2005-2006 accounts)
 Candidates for staffing the Electricity Regulatory
Authority are being interviewed
Corporatize and
Privatize EDL
 Contract signed with CRA to tender the
installation of remote meters
 Contract signed with IFC for attracting IPP to
install additional capacity at Deir Ammar and
investigate sale of plant
7
Transport Sector
Short-term transport sector priorities were discussed with the
Minister, after meeting with the main stakeholders – A roadmap to
implement these is being developed
Transport Sector Progress
 GR PCO met with Transport sector key stakeholders (Minister of Transport, Former
Director General of the Ministry of Transport, Civil Aviation Director General, and Port
Authority President)
 Transport sector priorities were agreed upon with the Minister of Transport:
– Airport privatization: Need to start preparing for the BRHIA privatization (e.g.,
concession or sales of assets), while establishing the CAA
– Ports expansion and corporatization:

Need to corporatize Beirut and Tripoli ports – Tripoli port might represent less
challenges for corporatization

Need to consider expansion of both ports through private sector involvement
 Next steps consist in developing a roadmap for the prioritized activities, to be agreed
upon by all stakeholders (Minister of Transport, HCP SG, Civil Aviation DG, Port
Authority DG, and MoF)
8
CDR
The CDR is working on enhancing its internal capabilities and
developing a Public Investment Plan
CDR Programs and Initiatives
1
Strengthen CDR’s procurement, financial management and legal functions capabilities:
– CDR is planning to launch soon the process of filling job vacancies for its existing
organizational structure
Enhance
Internal
Capabilities
– CDR will continue making use of foreign grants to contract consultants until all open
position are filled
Streamline related internal processes from bid and terms of reference preparation to
contracts management and disbursement:
– CDR relies on the policies internationally adopted for its internal procurement
processes, which vary according to the funding party requirements
2
A task force has been created and includes CDR, Ministry of Finance, and the Office of the
President of the Council of Ministers
The mandate of the task force is to develop a Public Investment Program (PIP)
Develop Public
Investment Plan
The task force is expected to work under the following guidelines:
– The Public Investment Plan should have a specific financial ceiling (defined by the MoF)
– The investment program should be in-line with the National Land Use Plan
– The investment program should ensure sector management capacity (e.g., capacity to
maintain the asset), as well as, achieve cost recovery
9
Next Steps
Going forward, Natural Owners should resolve pending issues,
finalize short term budget requirements, and endorse Paris III
Commitment Documents
Actions Required
 Telecom Sector:
– Appoint Liban Telecom Board in order to proceed with the corporatization process (in the
interim, PMO member would be reporting to the Steering Committee)
– Finalize legal decision on whether to sell or lease the mobile assets, when issuing new
licenses (Follow-up on Ministry of Justice for final verdict)
– Transfer relevant documentation and information from the Ministry of Telecom to TRA
 Power Sector:
– Develop and finalize Power Sector detailed workplans for short-term initiatives
– Formalize KEPCO contract
– Initiate auditing of EDL’s 2005-2006 financial accounts
 Transport Sector:
– Align key stakeholders on a roadmap for implementing priority programs
 Agree on CDR short-term initiatives, develop and finalize their detailed workplans
 Review and approve funding and TA requests, and finalize short term requirements
 Endorse Paris III Commitment Documents (Natural Owners)
10
Next Steps
A third IMC meeting should take place to finalize programs,
timelines, KPIs and funding, with steady-state implementation
progress reporting starting end of August
IMC Engagement Schedule (May – August 2007)
Meeting Objectives
Dates
 Appoint Secretary to the IMC and agree on his/her role
First Round of
IMC Meetings
 Review progress, and resolve escalated issues
 Review initiative and program allocation, and resolve
overlaps
 1st Infrastructure and Privatization IMC:
15 May 2007
 Follow up on 1st round of IMC meetings
Second Round of
IMC Meetings
 Endorse initiatives and program allocation
 Endorse cross ministerial initiative teams
 2nd Infrastructure and Privatization IMC:
5 July 2007
 Resolve escalated issues
 Follow up on 2nd round of IMC meetings
Third Round of IMC
Meetings
 Review and approve natural Owners funding/ TA
requests
 3rd Infrastructure and Privatization IMC:
22 August 2007 (tentative)
 Endorse Paris III Commitment Documents (Natural
Owners)
11
Appendix
 IMC Issues Register
 Telecom Sector
 Power Sector
 Transport Sector
 CDR Programs
 Other HCP Programs
12
IMC Issues Register
Liban Telecom corporatization is still delayed due to lack of proper
governance structure – Mobile sector privatization is still awaiting
the outcome of legal consultations on assets transfer
Infrastructure & Privatization IMC Issues Register
Issue Issue
ID
Level
001
H
Issue Description
Need to appoint Liban Telecom
Board of Directors or alternative
governance structure
Raised by
Minister of
Telecom/
HCP SG/
BAH
Date
15/05/2007
Assigned
to
Minister of
Telecom
Actions Needed
Deadline
Status
 The appointment of a Board would need
1.5 month
30/06/2007
Delayed
 PM and Minister of Telecom to become
permanent members of the Steering
Committee
18/05/2007 Completed
 MoT to assign PMO Members, who will
report to the Steering Committee
18/05/2007
Minister of  Legal consultation documents developed
Telecom
by HCP and TRA advisors to be sent to
the Minister of Telecom
002
H
Need to finalize the decision on
whether to sell or lease the mobile
assets when issuing new licenses
TRA
Chairman/
HCP SG/
BAH
Minister of
Telecom
15/05/2007
Dept. of
Legal &
Legislation
Matters
HCP SG
 Minister of Telecom to review legal
consultation document internally
Delayed
23/06/2007 Completed
30/06/2007 Completed
 Minister of Telecom to transfer the file to 31/07/2007 In Progress
the Department of Legal and Legislation
Matters at the Ministry of Justice which
will decide if the assets can be sold under
the current Privatization Law
 Citigroup/JP Morgan to proceed and
accelerate development of tender
documents
On-Going
On-Going
13
IMC Issues Register
A Power Sector Program has been endorsed by all stakeholders –
Key transport privatization initiatives have been identified by the
Minister of Transport
Infrastructure & Privatization IMC Issues Register
Issue Issue
ID
Level
003
004
H
H
Issue Description
Raised by
No consensus on approach for
power sector reform: In-house
BAH
reform vs. corporatization with Quick
Wins
Doubts about the approach for Deir
Ammar IPP structure
CDR
President
Date
15/05/2007
Assigned
to
Actions Needed
Minister of  Achieve consensus on the power sector
Energy
reform program
and Water
/ EDL /
 Options related to the CRA contract and
HCP
the corporatization process to be clarified
Deadline
Status
13/06/2007 Completed
18/06/2007 Completed
 Power Sector Program to be endorsed by 05/07/2007 In Progress
the Infrastructure & Privatization IMC
15/05/2007
Not
 The Prime Minister insisted on the need to
Applicable
proceed with an IPP for additional
generation capacity with an option to
include the current capacity
Completed
Minister of  Minister of Transport and HCP SG to meet 25/05/2007 Completed
Transport/
in order to define sector privatization
HCP SG
priorities, with support of GR PCO
005
H
Strategy relating to privatization of
other public entities (e.g., airport,
ports, tobacco) still under
development
Minister of
Transport /
Minister of
Finance
GR PCO
 GR PCO to meet with Ministry of
Transport DG, Port Authority President
and Civil Aviation DG to get input on
privatization options
GR PCO
 GR PCO to present transport privatization 04/07/2007 Completed
options to Minister of Transport
15/05/2007
Minister of  Align transport sector stakeholders on
Transport/
privatization roadmap
HCP SG
26/06/2007 Completed
31/07/2007 In Progress
14
Appendix
 IMC Issues Register
 Telecom Sector
 Power Sector
 Transport Sector
 CDR Programs
 Other HCP Programs
15
Telecom Sector
Telecom Sector – Program Charter 1
Program Title
Establish the Telecom Regulatory Authority
Program Owner
Minister of Telecom
Program Number
TEL-001
Key Stakeholders
Council of Ministers, TRA, MoF
High Level Work Plan
Program Objectives/Description
 Establish the TRA to regulate the telecommunications sector
 Achieve a competitive telecommunications market to deliver state-of-theart services at affordable prices to the broadest spectrum of the Lebanese
population




Create the Telecom Regulatory Authority and appoint its board
Issue decrees to facilitate operations of TRA
Transfer regulatory responsibilities to the TRA
Draft telecom policy outlining the liberalization path to be followed
Key Risks




MoF or MoT might not approve TRA budget
CoM might not allocate budget on time
CoM might delay financial and organizational decrees issuance
MoT might delay the transfer of responsibilities to the TRA
Resources
Requirements
Technical
Assistance
Description
 Management consultants to assist TRA in mapping
existing MoT regulatory processes
 Management consultants to design new processes
Budget
Ministry
Team




TRA Board
MoT Director General of Operations & Maintenance
MoT Director General of Equipment & Construction
MoT OSB Director
Milestones and Key Deliverables





TRA Board appointed
TRA budget approved and transferred
TRA financial procedures approved by ministers of Telecom and Finance
Documentation transferred by MoT
Information regarding current regulatory functions and relevant material
transferred by MoT
 TRA functions fully staffed
KPIs
 [To be developed at a later stage]
16
Telecom Sector
Telecom Sector – Summary of Paris III Programs and Initiatives
(Charter 1)
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline Implem.
Comments
1. Establish the Telecom Regulatory Authority
1a. Create the Telecom Regulatory Authority and
appoint its board
1b. Issue decrees to facilitate operations of the TRA
MoT, CoM
Q1 2007
MoT, TRA, CoM
Q1 2007 – Q4 2007
1c. Transfer regulatory responsibility and functions to
the TRA
MoT, TRA
Q2 2007 – Q3 2007
1d. Draft telecom policy outlining the liberalization
path to be followed
TRA, MoT*/ OSB(1)
XXX
Natural Owner
S
S
S
IMPLEMENTATION:
Q2 2007
S: Short term
S
M: Medium Term
 Completed
 TRA lacks resources
 Some decrees issued, and
other in progress
 In progress
 Documentation/ Information
transfer process is slow
 In progress
L: Long Term
17
Telecom Sector
Telecom Sector – Program Charter 2
Program Title
Corporatize Liban Telecom
Program Owner
Minister of Telecom
Program Number
TEL-002
Key Stakeholders
Council of Ministers, Liban Telecom Board,
PMO, Ministry of Finance, HCP, TRA
High Level Work Plan
Program Objectives/Description
 Establish and corporatize Liban Telecom
 Prepare the ground for privatization, hence creating a more competitive
telecommunications sector, and implementing an important phase of the
Telecom Law enacted in July 2002
Key Risks
 Steering Committee might delay setup of PMO
 CoM might delay decree issuance
Resources
Requirements
Description
Technical
Assistance
Budget
Ministry
Team













 Budget from Paris III*: $ 1,050,000
(*) Excluding implementation advisory support and
privatization
 Director General of Operations & Maintenance
 Director General of Equipment & Construction
 OSB Director
Issue decrees to establish LT and appoint governance structure
Setup Program Management Office (PMO)
Create LT organizational structure
Setup provisional opening balance and prepare asset transfer
Capitalize LT by transferring budget
Implement business support systems
Implement marketing plan
Set-up sales outlets
Migrate contracts with customers and vendors
Create LT brand and establish web presence
Migrate employees for LT launch
Issue license for Liban Telecom
Launch LT
Milestones and Key Deliverables





LT governance structure appointed
PMO staffed
LT Level 1 appointed
LT license issued
LT launched
KPIs
 [To be developed at a later stage]
18
Telecom Sector
Telecom Sector – Summary of Paris III Programs and Initiatives
(Charter 2)
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline Implem.
Comments
2. Corporatize Liban Telecom
2a. Issue decrees to establish LT and appoint
governance structure
2b. Setup Program Management Office (PMO)
 Delayed
MoT, CoM
Q2 2007
MoT, Liban Telecom Board*,
HCP
MoT, Liban Telecom Board*
Q2 2007 – Q3 2007
Q3 2007 – Q4 2007
2f. Implement business support systems
MoT, Liban Telecom Board*,
HCP
MoT, Liban Telecom Board*,
MoF
MoT, Liban Telecom Board*
2g. Implement marketing plan
MoT, Liban Telecom Board*
Q4 2007 – Q2 2008
M
 New ERP system (short)
 Billing system (medium)
 Not started
2h. Set-up sales outlets
MoT, Liban Telecom Board*
Q4 2007 – Q1 2008
L
 Not started
2i. Migrate customers and vendors contracts
MoT, Liban Telecom Board*
Q4 2007 – Q1 2008
M
 Not started
2j. Create LT brand and establish Web presence
Q3 2007 – Q4 2007
2k. Migrate employees for Liban Telecom launch
MoT, Liban Telecom Board*,
HCP
MoT, Liban Telecom Board*
Q3 2007 – Q2 2008
M
 LT Brand (short)
 Website (medium)
 Not started
2k. Issue license for Liban Telecom
TRA, Liban Telecom Board*
Q3 2008
M
 Not started
MoT, Liban Telecom Board*
Q3 2008
M
 Not started
HCP, MoT
Q4 2008
L
 Not started
2c. Create LT organizational structure
2d. Set-up provisional opening balance, and prepare
asset transfer
2e. Capitalize Liban Telecom by transferring budget
2m. Launch Liban Telecom
2n. Privatize Liban Telecom
S
Q3 2007
S
S
Q3 2007
S
S
Q4 2007 – Q2 2008
S
S
 Delayed
 Not started
 Not started
 Not started
Note: (*) Liban Telecom Board or temporary governance structuring namely Steering Committee in which the PM and Minister of Telecom are permanent members
XXX
Natural Owner
IMPLEMENTATION:
S: Short term
M: Medium Term
L: Long Term
19
Telecom Sector
Telecom Sector – Program Charter 3
Program Title
Privatize mobile telecom
Program CoOwner
Secretary General of HCP and TRA Chairman
Program Number
TEL-003
Key Stakeholders
Minister of Telecom, Parliament, CoM
High Level Work Plan
Program Objectives/Description
The privatization of the mobile sector consists in the issuance of two
licenses and the sale or lease of related assets
 Ensure continuity of service as current management agreements expire
on June 1, 2008
 Improve service quality
 Offer a broader variety of services
 Alleviate public debt and ensuing budgetary deficit
 Open access to best practice management and operations
 Create a more competitive telecom sector
Key Risks
 Lack of coordination from the current operators
 Parliament not convening
Resources
Requirements
Technical
Assistance
Budget
Team
 Draft and issue regulations (e.g., Interconnection, Competition, Consumer
Guidelines, Universal Services, National Roaming)
 Perform valuation of Licenses
 Perform financial due diligence
 Perform technical due diligence
 Perform legal due diligence
 Define and finalize the legal basis for the transfer of ownership of mobile
assets
 Finalize auction rules and procedures
 Publish invitation to tender and pre-qualification / qualification criteria
 Distribute Information Memorandum (IM), and provide data room access and
site visits
 Review transaction documents based on bidders’ comments, and distribute
revised documents
 Receive financial bids and conduct live auction
 Send termination notice to existing operators
Description
 Investment banks
 Financial, legal, and technical consultants
 International auditor
 Budget from other sources: $ 700,000
 Budget from Paris III: $ 2,250,000
 TOTAL BUDGET: $2,950,000




HCP Secretary general
Financial experts
Economic experts
Legal experts
Milestones and Key Deliverables




Mobile telecom regulations issued
Auction rules and procedures for sale of assets / licenses finalized
Financial bids received and live auction conducted
Termination notice to existing operators sent
 TRA experts
KPIs
 [To be developed at a later stage]
20
Telecom Sector
Telecom Sector – Summary of Paris III Programs and Initiatives
(Charter 3)
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline Implem.
Comments
3. Privatize mobile sector
3a. Draft and issue regulations (e.g., Interconnection,
Competition, Consumer Guidelines, Universal
Services, National Roaming)
3b. Perform valuation of Licenses
TRA
Q2 2007
HCP, TRA, PCM
Q1 2007 – Q3 2007
3c. Perform financial due diligence
HCP, MoT*/ OSB(1)
Q2 2007
S
S
S
3d. Perform technical due diligence
HCP, MoT*/ OSB(1)
Q2 2007
3e. Perform legal due diligence
HCP, TRA, MoT*/ OSB(1)
Q2 2007
3f. Define and finalize the legal basis for the transfer
of ownership of mobile assets
3g. Finalize auction rules and procedures
MoT*, HCP, TRA, MoJ, CoM
Q3 2007
TRA, HCP, MoT*, CoM
Q3 2007
S
S
S
S
3h. Publish invitation to tender and pre-qualification /
qualification criteria
3i. Distribute Information Memorandum (IM), and
provide data room access and site visits
3j. Review transaction documents based on bidders’
comments, and distribute revised documents
3k. Receive financial bids and conduct live auction
3l. Send termination notice to existing operators
 Issued 3 regulations to-date:
SMP, Interconnection,
Consumer Affairs
 TRA to provide input to
investment banks
 Requires Minister signature
 Tendering for consultants
underway
 Tendering for consultants
underway
 In progress
 Minister will review and
submit document to CoM
 HCP (Assets) and TRA
(Licensing)
 Not started
 Not started
TRA, HCP
Q3 2007
HCP, TRA, MoT
Q3 2007
HCP, TRA
Q3 2007
HCP, TRA
Q4 2007
L
 Not started
MoT, CoM
Q4 2007
L
 Not started
S
S
L
 Not started
 Not started
Note: (*) MoT denotes the Minister of Telecommunications; (1) Owner Supervisory Board
XXX
Natural Owner
IMPLEMENTATION:
S: Short term
M: Medium Term
L: Long Term
21
Appendix
 IMC Issues Register
 Telecom Sector
 Power Sector
 Transport Sector
 CDR Programs
 Other HCP Programs
22
Power Sector
Power Sector – Plan Agreed by Stakeholders (cont’d)
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline
Timing
Comments
1. Strengthen sector policy-making capacity
1a. Set-up an Inter-Ministerial Committee (IMC) to
PM, CoM
oversee sector reform
1b. Appoint qualified advisors at the Ministry of Energy MoEW/EDL, CDR
and Water to support on strategic planning and
evaluation of electricity policy reforms
Q2 2007
1c. Complete Sector Expenditure Review with World
Bank support
1d. Establish a National Control Center to properly
dispatch EDL’s generation and transmission
system
1e. Hire consultants to develop a Master Plan for the
Power Sector, including a Public Investment Plan
for generation and transmission, and to review
least-cost investment needs and supply options
MoEW/EDL, CDR
Q3-2007 – Q4 2007
CDR, MoEW/EDL
Q2 2007 – Q4 2008
Natural Owner
Q2 2007 – Q3 2007
S
 Completed
 Terms of reference prepared
and endorsed
 Committee in CDR to
evaluate the applications
 Contract negotiations
currently underway
S
 AREVA hired
M
MoEW/EDL, CDR
Q2 2007 – Q3 2007
S
M
1f. Assess the feasibility of increasing hydro-electrical MoEW
production
1g. Prioritize investments in transmission and
MoEW/EDL
distribution according to the findings of the Sector
Expenditure Review and the Electricity Master
Plan
XXX
S
TIMING:
Q1 2008 – Q2 2008
L
Q4 2008 – Q2 2009
L
S: Short term
M: Medium Term
 EDF hired and financed by
AFD to undertake Master
Plan
 11 months to complete the
PIP (according to EDL)
 CDR is negotiating with EDF
the update of the 1995
Master Plan for the
distribution sector in Greater
Beirut (45% of subscribers)
L: Long Term
23
Power Sector
Power Sector – Plan Agreed by Stakeholders (cont’d)
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline
Timing
Comments
2. Improve EDL operational efficiency
2a. Appoint consultancy team at EDL to perform
operational, financial, accounting, legal and
contract management activities, including
coordinating and assisting the HCP and its
advisory team in the corporatization and
privatization of EDL
2b. Formalize KEPCO contract
MoEW/EDL, CDR
Q2 2007 – Q3 2007
S
MoEW/EDL
Q2 2007
S
2c. Award contracts for the supervision of the KEPCO MoEW/EDL
O&M activities for Beddawi and Zahrani plants
2d. Decide on the viability of the Zouk and Jiyyeh
MoEW
plants, and rehabilitate viable existing power
plants
2e. Complete the expansion and rehabilitation of the
EDL, CDR
220KV transmission network
2f. Complete the auditing of EDL financial statements MoEW/EDL, MoF
from 2002 to 2006
Q2 2007
S
Q3 2007 – Q4 2007
S
Q1 2007 – Q2 2008
M
Q2 2007 – Q2 2008
S
S
M
XXX
Natural Owner
TIMING:
S: Short term
 Terms of reference prepared
and endorsed
 Committee in CDR to
evaluate the applications
 Contract negotiations
currently underway
 BDL rejected EDL request to
open LC
 Request resent to MoF
M: Medium Term
 Decide whether to undertake
the study with World Bank or
independent consultants
 Four specific issues to be
addresses (e.g., strings in
Mansourieh, touristic area in
Ghineh, etc.)
 Auditor appointed for 20022006 financial accounts
 Started auditing 2002-2004
 Need to initiate auditing of
EDL’s 2005-2006 financial
accounts
L: Long Term
24
Power Sector
Power Sector – Plan Agreed by Stakeholders (cont’d)
List of Programs and Initiatives
Sector Programs and Initiatives
2g. Reduce illegal network connections and enforce
bill collection through support from security forces
and the Justice department
Stakeholders
MoEW/EDL, Ministry of
Interior, MoJ
Preliminary Timeline
Timing
Q2 2007 – Q4 2008
M
Q4 2007 – Q1 2008
2h. Review and modify (if needed) restrictive oil
specifications based on 2003 study (if highlighted
in 1b. study)
MoEW/EDL
2i. Agree on the scope for gas pipeline to connect
Zahrani and Beddawi plants (as defined in 1b.)
2j. Improve procurement process of fuel and gas oil,
to ensure better quality and reduce high premiums
2k. Examine the supply of Liquefied Natural Gas to
the Zahrani plant
2l. Commit the supply of Natural Gas to the Beddawi
plant
MoEW
Q4 2007 – Q1 2008
MoEW, MoF
Q2 2007 – Q4 2007
MoEW
Q2 2007 – Q3 2008
MoEW
Q1 2008 – Q2 2008
2m. Complete the infrastructure needed for the Ksara
station (including 400 KV network) to allow
Lebanon’s integration into the regional electrical
network known as the “Seventh Joint”
XXX
Natural Owner
M
M
 Automatic meters would
allow to identify easily the
illegal network connections,
and to manage efficiently the
receivables
 Enforcement would require
the support of Security
Forces, Lebanese Army, as
well as fast response from
Justice department
 Libnor study of 2003
 Negative political impact due
to environmental
considerations
 Subject to availability of
Natural Gas supply
S
M
M
EDL, CDR
Comments
 Contract signed with Egypt,
with opportunity to double
 Gas would arrive in Q2 2008
to Deir Ammar plant
Q1 2007 – Q1 2008
M
TIMING:
S: Short term
M: Medium Term
L: Long Term
25
Power Sector
Power Sector – Plan Agreed by Stakeholders (cont’d)
List of Programs and Initiatives
Sector Programs and Initiatives
2n. Review EDL tariff structure
XXX
Natural Owner
Stakeholders
MoEW/EDL, CoM
TIMING:
Preliminary Timeline
Timing
Comments
L
 Several studies are available
such as the EDF tariffs study
and NERA tariffs study
(2003)
 Tariff review has a negative
political impact: CoM took
decision to increase fixed
tariff in 2003/2004, with
limited success
Q1 2009 – Q4 2009
S: Short term
M: Medium Term
L: Long Term
26
Power Sector
Power Sector – Plan Agreed by Stakeholders (cont’d)
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline
Timing
Comments
3. Corporatize and privatize EDL
3a. Retain consultants to assist the HCP with the
corporatization and restructuring of EDL
3b. Establish the Electricity Regulatory Authority and
define its financial and organizational structures
3c. License private companies to install and operate
remote meters
HCP, MoEW/EDL, CDR
Q2 2007
MoEW, HCP, OMSAR, CoM
Q2 2007 – Q1 2008
MoEW/EDL, HCP
Q2 2007 – Q4 2008
S
S
S
3d. Launch tender for service contracts for distribution MoEW/EDL, HCP
Q2 2007 - Q3 2008
S
Q2 2007 – Q4 2007
3e. Develop additional generation capacity through
IPP: Install additional capacity in Deir Ammar with
private sector participation
HCP, MoEW
3f. Undertake asset registration and valuation of
EDL’s assets
3g. Determine organization structure, job description,
and compensation and benefits scheme
3h. Conduct the legal due diligence to address any
issues relating to the corporatization and
restructuring process
3i. Establish New EDL and draft its bylaws
HCP, MoEW/EDL
Q4 2007
HCP, MoEW/EDL
Q3 2007 – Q1 2008
HCP, MoEW/EDL
Q4 2007
XXX
Natural Owner
S
 On-going, currently
interviewing candidates
 Contract signed with CRA to
tender the installation of
16000 pilot remote meters
and manage the distribution
network
 Contract signed with CRA to
solicit private sector
participation in distribution
 Contract signed with IFC on
15 June 2007 for attracting
IPP to install additional
capacity at Deir Ammar and
investigate sale of existing
plant
S
M
M
HCP, CoM, ERA
TIMING:
Q1 2008
S: Short term
M
M: Medium Term
L: Long Term
27
Power Sector
Power Sector – Plan Agreed by Stakeholders (cont’d)
List of Programs and Initiatives
Sector Programs and Initiatives
3j. Transfer selected assets and liabilities to New
EDL
3k. Appoint the Board of each entity of New EDL
group of companies
3l. Privatize New EDL entities through sale of up to
40% of shares to strategic investor
XXX
Natural Owner
Stakeholders
Preliminary Timeline
HCP, MoEW
Q3 2008
CoM, MoEW, HCP
Q3 2008
HCP, MoEW, CoM
Q1 2009
TIMING:
S: Short term
Timing
Comments
L
L
L
M: Medium Term
L: Long Term
28
Appendix
 IMC Issues Register
 Telecom Sector
 Power Sector
 Transport Sector
 CDR Programs
 Other HCP Programs
29
Transport Sector
Transport Sector – Summary of Paris III Programs and Initiatives
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline Implem.
Comments
1. Improve Air Transport Sector
1a. Build additional radar to cover North of Lebanon
MPWT, DGCA
Q3 2007 – Q2 2008
1b. Enhance Security in Beirut International Airport
MPWT, DGCA
Q3 2007 – Q1 2008
1c. Restructure and privatize Free Zones at Beirut
International Airport
1c. Appoint CAA Board of Directors
MPWT, DGCA, CoM,
Parliament
MPWT, CoM
Q3 2007 – Q3 2008
1d. Setup BIAC and appoint Board of Directors
MPWT, CoM
Q3 2008
1e. Privatize BIAC
HCP, MPWT
Q4 2008 – Q4 2009
2a. Develop Maritime Transport Policy
MPWT
Q1 2007 – Q3 2007
2b. Establish a Maritime Transport Authority
MPWT, CoM
Q1 2007 – Q3 2007
2c. Clarify the functions of Port administrations
MPWT
Q2 2007 – Q3 2008
2d. Develop an investment program for Ports of Beirut MPWT
and Tripoli
Q3 2007 – Q2 2008
2e. Develop an IT platform for trade, freight, customs,
and regulatory purposes
MPWT
Q2 2007 – Q3 2008
2f. Privatize Ports of Beirut and Tripoli
HCP, MPWT
Q4 2007 – Q4 2009
Q3 2007
 No Free Zone law currently
exists
 To be reviewed in light of
Airport privatization roadmap
 To be reviewed in light of
Airport privatization roadmap
 To be reviewed in light of
Airport privatization roadmap
2. Improve Maritime Transport Sector
XXX
Natural Owner
IMPLEMENTATION:
S: Short term
M: Medium Term
 Draft policy prepared and
ready to be circulated
 Draft law for the authority
prepared
 In progress
 Expansion of Port of Beirut to
the North and Port of Tripoli
is under study
 Transport Trade and
Facilitation Committee
revived
L: Long Term
30
Transport Sector
Transport Sector – Summary of Paris III Programs and Initiatives
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline Implem.
Comments
3. Improve Land Transport Sector
3a. Develop Land Transport Policy
MPWT
Q1 2007 – Q3 2007
3b. Establish a Land Transport Authority
MPWT, CoM
Q1 2007 – Q3 2007
3c. Revise licensing and enforcement framework for
urban and intercity passenger transport services
3d. Establish logistics terminals to enhance
distribution of goods
3e. Implement a bus-based collective rapid passenger
transport system for the Greater Beirut Area
3f. Initiate the reconstruction of the railway section
between Port of Tripoli and the Lebanese Syrian
border
MPWT
Q1 2007 – Q2 2008
MPWT
Q1 2008 – Q1 2009
HCP, MPWT
Q4 2007 – Q3 2010
MPWT
Q1 2007 – Q1 2010
3g. Establish pedestrian overpasses
MPWT
Q1 2007 – Q1 2008
3h. Introduce performance-based maintenance
contracts for road maintenance and rehabilitation
3i. Privatize OCFTC
MPWT
Q4 2007 – Q4 2008
HCP, MPWT
Q4 2007 – Q4 2008
XXX
Natural Owner
IMPLEMENTATION:
S: Short term
M: Medium Term
 Draft policy prepared and
ready to be circulated
 Draft law for the authority
prepared
 In progress
 Engineering design of
railway section completed
with the specifications and
bill of quantities
 Ask Dr. Tamam Naccache
and Youssef Salam
L: Long Term
31
Appendix
 IMC Issues Register
 Telecom Sector
 Power Sector
 Transport Sector
 CDR Programs
 Other HCP Programs
32
CDR
CDR – Summary of Paris III Programs and Initiatives
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline Implem.
Comments
1. Restructure CDR’s capacity to undertake
reconstruction & development capital investments
1a. Strengthen the capacity of CDR’s procurement,
financial management and legal functions
CDR
Q1 2007 – Q4 2007
S
1b. Streamline related internal processes from bid and CDR
terms of reference preparation to contract
management and disbursement
Q1 2008 – Q4 2008
L
Q3 2007 – Q4 2008
S
 CDR is planning to launch
soon the process of filling
job vacancies for its existing
organizational structure
 CDR relies on the policies
internationally adopted for
its internal procurement
processes
2. Develop Public Investment Plan
2a. Develop a Public Investment Plan (PIP)
XXX
Natural Owner
CDR, MoF, Office of PCM
IMPLEMENTATION:
S: Short term
M: Medium Term
 A task force has been
created and includes CDR,
MoF, and the Office of PCM
 The role of the task force is
mainly to develop a Public
Investment Program (PIP)
 The task force is expected
to work under the following
guidelines:
– PIP should have a
specific financial ceiling
– The investment
program should be inline with the National
Land Use Plan
– The investment
program should ensure
sector management
capacity, as well as,
good cost recovery
L: Long Term
33
Appendix
 IMC Issues Register
 Telecom Sector
 Power Sector
 Transport Sector
 CDR Programs
 Other HCP Programs
34
HCP
Higher Council for Privatization – Summary of Paris III Programs
and Initiatives
List of Programs and Initiatives
Sector Programs and Initiatives
Stakeholders
Preliminary Timeline Implem.
Comments
1. Privatize other public entities
1a. Develop and administer Private-Public Partnership HCP, Parliament
(PPP) Law
1b. Privatize Beirut port silos
HCP, MoET
1c. Privatize water and waste water sectors through
concessions
1d. Privatize Government holdings in tobacco
manufactories
1e. Privatize Government holdings in non-productive
refineries
XXX
Natural Owner
Q3 2007
M
L
HCP, MoEW
L
HCP, MoF
L
HCP, MoEW
IMPLEMENTATION:
 Passed by CoM, in June
2007
L
S: Short term
M: Medium Term
L: Long Term
35