Privatization project

The evaluation covered the period FY88-6/90. Despite a high overall level of activity in the privatization program, project-funded assistance has been under-utilized. Commitments total slightly over $300,000, only about 6% of the $5 million grant. The low utilization of project services is due to several factors. (1) Project TA was suspended for 7 months while the cabinet-level committee on privatization worked to resolve various procedural issues with the Commission on Audit. (2) The project initially awarded indefinite quantity contracts (IQC"s) to 4 accounting firms and 1 investment advisory firm, principally for their ability to provide valuation services. However, the DE"s have tended to use their own staff more heavily than expected for these tasks. Additionally, DE"s have in some instances used their own budget resources to contract non-IQC firms for specialized services, apparently unaware that project funds were available to contact the services of such firms. (3) The privatization program"s focus has gradually shifted from the disposal of transferred assets to the divestiture of large and important government-owned or controlled corporations. These corporations mainly require expertise in investment bank-type financial advisory assistance, and the DE"s have not felt that the IQC firms meet their requirements in this area. Nor, again, have they pursued the possibility of project funding for non-IQC firms.