The government has pushed the privatisation of sugar factories one step forward, kicking off the process of hiring a consultancy firm that will oversee the transaction. All told, the transaction adviser will supervise the privatisation operations of nine sugar estates.

The Public Enterprise Holding & Administration Agency, which handles the privatisation of state-owned companies, launched an expression of interest this week by inviting consultancy firms to apply. Welkayit, Tendaho, Kesem, Omo Kuraz I, II and III, Arjo-Dedesa, and Tana-Belese I and II are the sugar estates slated for privatisation.

The Agency stepped into the privatisation process after the Ministry of Finance completed pre-privatisation tasks that took two years. The Ministry conducted a technical assessment for all of the companies, drafted a sugar policy and proclamation, designed a marketing strategy for the companies, prepared a privatisation strategy and conducted valuation as well as environmental impact assessments.

IBS Consulting Group, a South African firm, recently completed conducting the environmental impact assessment with local experts also involved in the process. Booker Tate Limited, an English consultancy, has completed its work on the asset valuation of the companies.

"Before jumping into the privatisation process," said Brook Taye (PhD), a senior advisor at the Ministry of Finance, "we needed to complete all the studies and research."

Assuming the task from the Ministry, the Agency is taking the first step of the process by recruiting a consultant. Interested bidders, which can be a single consultancy, a consortium of firms, or joint venture companies, are expected to file their expressions of interest before December 11, 2020.

The bidders are expected to have at least two experiences in the past five years in developing, assessing and advising on privatisation activities either as an advisor or as an agent, and wide experience in the sugar sector, including legal, regulatory, operational, industry and technical experience, according to the announcement.

The winning firm, which will be selected with a quality and cost-based selection method, will prepare a plan and recommendations for a privatisation transaction, undertake the market research, and carry out detailed analysis of alternative transaction approaches to recommend the one best suited to each company or all companies. It will also engage with assisting the Agency in any activities after bringing a strategic investor on board as is necessary to close the transaction.