Action plan for privatization in the power sector, Ukraine

For drawing up a strategic action plan for further privatization of power sector enterprises, Fichtner advised the Ukrainian government by investigating privatization activities in various EU countries and analyzing the organizational, financial and economic constraints and conditions in the Ukraine. Various privatization models and options are compared, potential investment risks investigated and measures to generally improve the framework conditions for floating privatization tenders are worked out. On this basis, a strategic action plan for the private sector to acquire holdings in the Ukrainian power sector was devised, with concrete realization steps and assignment of responsibilities.

Creation of a manual for the awarding of power supply concessions in rural areas and development of an action plan for institutional strengthening, Senegal

In order, in the coming ten years, to increase access to electric power from at present 8% to 60% of the population, it is planned to award concessions to private domestic and foreign investors. In order to support the responsible authority (ASER), Fichtner created five manuals which describe in detail the procedure which has to be followed for the awarding of concessions. In addition, recommendations were given for the institutional strengthening of ASER and also of the regulatory authority. This is intended, overall, to result in an improved implementation of the electrification program.

Procurement advisor for a water supply and sanitation project, Malawi

The water supply utilities of Lilongwe and Blantyre in Malawi are plagued by an aging infrastructure and high water losses. They are receiving funding from the European Investment Bank (EIB) and the EU to invest in their infrastructures and upgrade water supply in low-income peri-urban districts. On behalf of the EIB, Fichtner is advising the two utilities in their selection of a private sector service contractor. The tasks cover assistance during the prequalification round, tendering, bid evaluation and negotiations with the selected bidder up to contract signing.

Revaluation of the fixed assets of the Central Electricity Board, Mauritius

As part of the review of net asset values, the fixed assets of the CEB are being revalued. On the basis of a methodology developed by Fichtner, all relevant assets are being systematically assessed. The current market values are being determined in consideration of the present condition of the assets, age of the assets as well as their replacement values. Valuation is performed in accordance with the guidelines of the International Financial Reporting Standards (IFRS). Finally, the data are computerized for easy use within assets accounting.

Assistance in setting up a private power distribution company, Palestine

A private electricity distribution company is to be established from the Energy Department in Hebron, in the Palestinian Territories. Alongside the introduction of an efficient IT system, covering all the company’s business activities, Fichtner provides consultancy services for introducing accountancy and financing procedures in line with International Accounting Standards. Additionally, tools will be worked out for supporting the company’s strategic planning together with modules for setting up an efficient organizational structure. Fichtner is also drawing up specifications for an investment project financed by the World Bank and the Italian Government for modernizing the local distribution network.

 top

Implementation of a restructuring and privatization program, Saudi Arabia

For the restructuring and privatization program of the Saudi Saline Water Conversion Corporation (SWCC), Fichtner has been retained as technical consultant. The first part of the contract, covering Yanbu-3 410 MW Power Plant with a desalination plant of capacity 400,000 m³/d, but which includes as options other independent water and power production projects (IWPPs), encompasses preparation of rating-based technical specifications, support when formulating project contracts and drawing up the financing model as well as for bid evaluation and contract negotiations. Additionally, the need for capital investment and the cost structures for this restructuring are analyzed, and how these plants are to be assigned to the new subsidiaries is defined.

Consultancy for privatization of Riyadh’s water supply and sanitation infrastructure with establishment of a national water utility, Saudi Arabia

In connection with restructuring of Saudi Arabia’s water sector, a national water utility is being set up and, additionally, Riyadh’s water supply and sanitation services are being privatized. Under contract to the Saudi Ministry of Water and Electricity (MOWE), Fichtner as lead consultant is implementing this privatization process and coordinating establishment of the National Water Company (NWC). Starting with the selection of a suitable PPP model and sounding of the market, we are managing the entire transaction up to evaluation of received proposals and support of the Ministry during contract negotiations. For setting up the NWC, plans for transferring plant assets and personnel are being drawn up, with rulings and working practices for its operation worked out. This management contract for Riyadh’s water and sanitation sector is the biggest of its type in the Middle East.

Privatization of waste management in Abu Dhabi, United Arab Emirates

For privatization of waste management in the Emirate of Abu Dhabi, Fichtner first analyzed the legal, regulatory and institutional background, made an appraisal of the existing physical assets, and developed a waste management concept, including siting of facilities that would be required in the future. Based on the findings, our experts developed a comprehensive waste management masterplan for all municipal solid wastes together with a strategy for privatizing the various services. A financing model was also developed with a concept for inviting tenders for the services. The documents for two requests for tenders under a BOT scheme were drawn up and support provided during bid evaluation and negotiations with bidders.

 top

Privatization study for the transmission and distribution system (electricity and water) for KAHRAMAA (Qatar General Electricity & Water Corporation), Qatar

Fichtner is providing comprehensive consultancy services to the national electricity and water company in relation to the possible privatization of the electricity and water supply in Qatar. The first phase of the project involves a general comparison between a privatization option for the electricity and water company vis-à-vis maintenance of the status quo, including a presentation of the advantages and disadvantages of privatization. In the event of continuation as a state-owned company, KAHRAMAA will be provided with a concept for optimizing its internal processes and procedures. This will be based, among other things, on international benchmarking with comparable companies. In the case of privatization, the required legal changes will be pointed out, the assets valued, potential investors identified and the documents drawn up for the competitive bidding process.

Privatization of water supply and sewage in Yerevan, Armenia

With the aim of raising efficiency and improving the financial situation of the water supply and sewage system in Yerevan, Fichtner provided the Armenian Government with flanking support throughout the entire process up to contract signing for tying in a private operator and investor for the Yerevan Water and Sewage Company. The steps comprised: conducting a survey of the present situation of water supply and sewage, developing a strategy for capital investment measures, and configuring the tariff structure. As further preparations for private participation, a proposal was worked out for optimizing management and operating processes and a market study conducted to identify potential operators. As the final project step, tender documents were drawn up and support provided for concluding the contract.

BOO Scheme for Seawater Desalination Plant, Singapore

To meet the growing demand for water and promote self-sufficiency, the Singapore Government decided to invite tenders from the private sector for a build-own-operate (BOO) plant for supplying 30 MIGD of desalinated water. After a detailed pre-tender feasibility study, Fichtner prepared pre-qualification documents and handled the bidder screening process. For the bidding phase, tender documents – request for proposals – with a model off-take contract – Water Purchase Agreement – were drawn up. Bid evaluation led to a recommendation for contract award and, finally, Fichtner assisted the client during contract negotiations.

 top

Design of Financial Settlement System for the Power Market in Indonesia

The Government of Indonesia has embarked on a power sector restructuring program to establish multiple players and a competitive electricity market for Java and Bali. As one step in this process, Fichtner designed a financial settlement system for the transitional single buyer and the final multiple buyer/multiple seller market, which will serve participants trading in the spot market and bilateral contract markets. This followed on from an in-depth review of the restructuring policy and market rules to ensure attainment of the main objectives of setting up a financially viable, competitive, transparent and economically efficient electricity market.

Support of search for investors and operators for a new landfill, Georgetown, Guyana

Technical support for the search for investors and operators for the new Haags Bosch Landfill for final disposal of wastes from Georgetown and 15 neighboring communities; scope of services: due diligence investigation, market analysis, setting up a financial model, check of legal framework conditions, investigation and specification of transaction structure, risk analysis, preparing marketing material, international road show, drawing up tender documents and evaluation criteria, prequalification of bidders, drawing up contract documents, setting up a data room, assistance in investor due diligence checks.

Due diligence for acquisition of a supra-regional gas transport company, Germany

In view of the prospect of expansion of the energy business in the German market, a company of international steelmakers awarded Fichtner a contract for undertaking technical and organizational due diligence investigations for their planned acquisition of a German gas transport company. Emphasis was placed on evaluating the technical assets and organization as well as determining the future need for capital investment and the anticipated expenditures for operation and maintenance. For this purpose, the present structures of the target company were analyzed and a concept for effective use of resources developed. Our consultancy services proved to be decisive for the successful acquisition.

Competitive bidding process for operation management of Mittleres Elstertal local authorities water/wastewater association, Germany

The starting point for the project was a structural investigation by Fichtner into the optimum form of organization for operation management of water supply and sewage services, involving an assessment, in particular, of the stability of charges, efficient investment policy, maintenance of municipal influence, modern human resources policies and transparency of the work of the association. On the basis of the results of the investigation, Fichtner was commissioned by the local authorities association to provide support with the transfer of operation management to a private partner without this involving the transfer of control over investments or rules and procedures. Consequently, Fichtner is conducting the entire competitive bidding and bid evaluation process for a local authorities association which, with 170,000 customers, is one of the largest such associations in Germany.

 top