1. Jordan Post Company   

§ The Government of Jordan endorsed on January 25^th 2000 the Jordanian Postal Services Restructuring Strategy. According to this strategy, the policy-making role assumed by the Ministry of Telecommunications has been unbundled from operation and regulation which has been entrusted to separate entities. The strategy   also specified the main objectives, policies and proposed procedures to restructure postal services sector.

§ The temporary postal services Law No.5/2002 was issued on 17 February 2002. By virtue of the law, Jordan Post Company was formed and later registered on April 16th 2002 as a shareholding company totally owned by the GoJ.

§ A performance agreement was signed between Jordan Post Company and The Ministry of Telecommunications with a vesting date allowing the company to assume full operational responsibility for a specified transitional period as of January 1st 2003; The agreement was renewed twice the latest being on September 3rd 2008.

§ The Council of Ministers decided, on December 30th 2003, to proceed with the privatization of the Post Company through strategic partnership option with a specialized post operator. 

§ The Financial Advisor- Lazard Freres consortium- was retained on March 30th 2006.

§ The consultant finalized the assessment and revision phase of the company’s financial regulations, and, the sector legal and regulatory framework; prepared the valuation of the company, the marketing & sale strategies, the bidding documents and the data room.

§ The Postal Services Law No (34) for the year 2007 was issued replacing the temporary law.

§ The Council of Ministers approved, on January 6th 2009, the privatization strategy encompassing the tendering of up to 74% of the company’s shares exclusive of the company’s land and real estate that shall be retained by the GoJ.

§ Invitation for Expressions of Interest was published in the local and international press on February 23rd 2009.

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2. Civil Aviation Authority/ Restructuring  

§ The Council of Ministers approved, in July 2001, the restructuring of the Civil Aviation Authority CAA and the privatization of the Jordanian Airports;

§ Law no.38/2002 was endorsed to be read with CAA Law no.26/1982 paving the way for the private sector to engage in investments and management activities. By virtue of this law, The Ministry of Transport assumes the policy-making role of the aviation sector ; CAA assumes the role of the sector’s regulator. 

§ The GoJ approved, in October 2002, the following CAA restructuring strategy and methodology and the procedures for the privatization of the airports. CAA to operate with financial independence and on a commercial basis:

A.     Tasks regulation phase : CAA services had been unbundled into five business units within a single entity, as follows:

B.     Jordan Airports Commercialization and the development of CAA regulatory role.

C.    Private sector participation and investment in the airports and Queen Noor Civil Aviation Technical College:

§ As one of the four components of the EU “Support for Regulatory Reforms and Privatization in Infrastructure", an advisory group has been retained in June 2004, to assist and follow up on CAA restructuring through separating the regulatory from the operations role, and to provide technical assistance in effectively preparing the airports for private sector participation. to strengthen CAA institutional capacity and assist it to regulate effectively the civil aviation sector.

§ The advisor finalized the inception report and all relevant studies required for: (a) the establishment of Jordan Airports Company for a interim period. (b) new specific mandate and role of CAA as the sector’s regulator; (c) creation of  Jordan Air Traffic Management Company (JATMAN), in addition to comprehensive studies encompassing the organizational structure, prices and tariffs, QAIA and Marka asset valuation; Human Resources structure, airports security, requirements to upgrade and develop the data communication, environmental assessment, and all relevant specific details required. The advisor submitted the inception report to the Ministry of Transport

§ A new Civil Aviation Law no. 41 for the year 2007 has been endorsed and came into effect as of August 1st 2007, allowing for private sector participation in airport services including the creation of a Regulator Commission (CARC), Jordan Air Traffic Management Company (JATMAN) and Jordan Airports Company (JAC).  By virtue of the law, CAA currently assumes the role of the regulator.

§ The Council of Ministers endorsed a decision, on May 27th 2008, approving the creation of JAC (Jordan Airports Company) as an independent shareholding company totally owned by the GoJ with a capital of JD 28.5 million. JAC  assumes the responsibility of airport operations (Marka Civil Airport and QAIA) and future airports in the Kingdom.

§ Jordan Air Traffic Management Company (JATMAN) is expected to be registered, during the second half of 2009,  as a shareholding company totally owned by the GoJ to  manage and operate the navigation services at Jordan airports.

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3. Jordan Petroleum Sector Reform

4. Privatization of JPRC downstream Operations (Logistics, Distribution, Retail and LGP Assets)                                        

§ The Council of Ministers adopted, on December 9th, 2004 Jordan's Comprehensive Energy Sector Strategy setting the general framework for Petroleum Sector restructuring and liberalization and opening it to competition; restructuring of Jordan Petroleum refinery Company (JPRC) and the privatization of JPRC logistics, distribution, retail and LPG operations and assets.

§ A Petroleum Restructuring / Reform Implementation Plan was adopted in April 2005 including three basic initiatives to proceed in parallel, namely: (a) Petroleum Sector Reform Initiative, (b) JPRC Restructuring Initiative and (c) a Privatization Initiative encompassing the privatization of JPRC logistics, distribution, retail and LPG operations and assets. The main components of the plan’s initiative are as follows:

Component One: Petroleum Sector Reform

§ Ending JPRC concession agreement and enabling it to perform on commercial basis. Restructuring JPRC and unbundling the logistics, distribution and LPG services from core business as they have no significant impact on the performance of the company as well as privatizing those assets.  

§ Adopt a market-based pricing regime for petroleum products based upon the principles of International Parity Pricing (IPP).

§ Introduce and develop a legal and regulatory framework for the sector and enhance fair competition away from preferential treatment. In the context of this framework, the GoJ represented by the Ministry of Energy and Natural Resources, shall be the policy-maker, while a new regulator shall be established to assume the supervision and follow-up responsibilities, and ensures the enforcement of the sector policies.   

§ Implement the proposed "open access" logistics regime (storage and transport). The newly licensed distribution companies shall, upon establishment, equally utilize the logistics’ company facilities with no preferential treatment.

§ Establish a Petroleum Sector Regulator to be subsequently placed with the Energy Regulatory Commission recommended by the sector’s comprehensive strategy.

§ License four distribution companies with relatively equal market shares for a 2-3 year transitional period after which the fuel distribution market shall be liberalized and open to new entrants.

§ JPRC shall be granted a minimum of 25% distribution share through a separate JPRC totally owned company.

§ Establish one logistics company with the “open access” regime governing its operations. This logistics company shall be banned from trading in or importing petroleum products.

Component Two: JPRC Restructuring

§ Conclude the negotiations pertaining to the Petroleum Concession Agreement with JPRC while safeguarding the shareholders rights, protecting the viability of JPRC refining operations and safeguarding the GoJ financial rights.

§ Acquisition of all JPRC logistics, distribution, retail and LPG operations and assets outside the perimeter of the refinery for their onward sale through privatization.

§ JPRC logistics assets, including all those outside the refinery perimeter, are to be placed with a new Logistics company. 

§ JPRC distribution and retail assets (and associated markets) are to be unbundled and allocated to four new oil marketing companies, each with relatively equal market share and national coverage. The four companies shall be granted a 2-3 exclusivity period after which new companies may enter the market and customers may change their oil marketing company supplier. The four companies shall be later privatized through a competitive tendering process.

§ JPRC shall locate a strategic partner to lead the company’s expansion and provide required financing.

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Component Three: Privatization of JPRC logistics, distribution, retail and LPG operations

a)Logistics operations

–  The JPRC storage and terminal assets, and associated staff, are to be incorporated within a new petroleum sector Logistics Company established in accordance with the highest technical, environmental and health standards and operates in accordance with the “open access” regime with tariffs set by a formula that guarantees to JOTC shareholders a fixed rate of return on non-amortized investment.

–  GoJ is to proceed with an international tendering process to privatize a specific block of the company. Investors shall be obliged to submit an investment plan proposal to improve oil product supply infrastructure in the country. Prior to signature of the share purchase contract, there would be an obligation to submit a collective JOTC Investment Plan for the approval of GOJ. This will then become part of the license .

b)Distribution operations

–  JPRC distribution and retail assets, and associated staff, will be allocated to four new companies licensed to market, distribute and retail petroleum products in Jordan, as well as engage in trade.

–  GoJ to proceed with an international tendering process for the privatization of the four companies.

c)LPG operations

–  LPG filling facilities shall be separately offered for sale to interested investors. No investor is to be awarded more than one facility. Investors are obliged to manage, operate and invest in the newly owned LPG filling facilities in accordance with the highest technical, environmental, health and safety standards.

–  JPRC has been officially notified by the GoJ in March 2005, of the ending of its Petroleum Concession Agreement as well as the general framework for the restructuring plan and strategy adopted by the GoJ in this respect.

–  A Steering Committee and Technical Committee for the project have been formed in March 2005 comprising The Ministry of Energy and Mineral Resources, the Ministry of Finance and the Executive Privatization Commission to supervise and follow up on the various phases of the sector’s liberalization and restructuring.

–  JPRC had been requested to retain a specialized international advisory firm to assist the company in attracting a strategic partner and to design an implementation action plan and time schedule for the expansion of JPRC. The advisory firm has been granted full support by the GoJ to facilitate its tasks. Accordingly, on 19/12/2005, JPRC retained Citigroup advisor to the project.    

–  A number of specialized international consultants have been retained, through international tendering procedures, to assist in the preparation of the following studies required for the implementation plan:

A.     Petroleum Pricing study - prepared by Tom Houston (H ouston & Associates/Canada) in November 2005, and endorsed by the Council of Ministers on May 9^th 2006. The pricing mechanism for avtour and bunker fuel was enacted as of June 1^st 2006 and the heavy fuel oil (industrial) and Asphalt prices as of February 1^st 2007.

B.     Draft “Open Access Regulations”- prepared by Tom H ouston in January2006 to regulate and operate the logistics services.

C.    “Legal & Regulatory Framework” prepared by H ouston International Business Corporation/USA in November 2006, in light of which a draft Petroleum sector Law has been prepared  specifying the role of the Ministry of Energy and Mineral Resources, the sector’s regulator and the companies operating in the petroleum sector.  

D.    Comprehensive and Due Diligence Study of JPRC assets and downstream operations prepared by Channoil Consulting Ltd in April 2007 encompassing a due diligence audit of JPRC logistics, distribution, retail and LPG assets and operations inside and outside the refinery perimeter.

–  The government concluded, on February 25th 2008, a settlement agreement with JPRC in connection with ending JPRC concession as of February 25th 2008. Moreover, a service agreement in connection with petroleum products import, storage, and distribution for the post-concession expiration date has been signed with JPRC and extended till 2009.   

–  Upon a decision endorsed by the Council of Ministers, on February 5th 2008,  in connection with price liberalization, fuel subsidies have been phased out and pricing was determined according to a special formula as of February 8th 2008.

–  A consultant (Taylor-DeJongh) was retained on April 30th, 2007 to proceed with the establishment of the marketing and logistics companies to be followed by procedures for the privatization of those companies as well as for Petroleum Sector liberalization. Prior to the expiration of the consultancy services contract on September 30th 2008, the consultant finalized part of the required bidding documents.

–  On December 24th 2008, the Cabinet endorsed a decision to retain Charles River Associates replacing Taylor-DeJongh to proceed with the petroleum sector restructuring program.

–  Invitation for Expressions of Interest for the marketing companies and the logistics company has been published on September 14th 2008. On October 30th 2008. 12 offers were received expressing interest in both tenders, an additional 5 offers expressed interest in the Logistics Company only, and 6 companies expressed interest in the marketing companies. Upon finalizing the pre-qualification procedures, 14 companies were pre-qualified for the marketing companies tender, 10 were pre-qualified for the logistics company tender.

–  The transaction is expected to be completed during the Q4 2009.

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