The trend in the country's Fourth Economic, Social and Cultural Development Plan is towards the shrinkage of state enterprise. The government has accordingly paved the road for further participation of private entrepreneurs and investors by making pertinent adjustments in the rules and regulations. In conformity with the state policy, IDRO has aligned its development plans so that it may contribute to the growth of the private sector and offer the respective support. More specifically, IDRO adheres to the policy of encouraging private sector investment in industrial activities and offering the sector pertinent technical and technological support.
Objective of Partnership
Based on investment priority and capitalization ratios, IDRO is willing to contribute to the boost and development of the country's industrial capacities by entering into partnership with the private sector.
Modality of Partnership
In order to achieve the above objective, a private joint stock corporation, will be established and registered in which IDRO will have a share of maximum 40 percent and one director of the Board of Directors, will be appointed by IDRO.
IDRO's equity capital share may rise up to 49 percent if the projects to be carried out are high-tech industrial projects.
Regarding finances, around 60 percent of the required equity capital will be obtained in rials and/or hard currency through banking facilities. All required pledges, commitments, and the reimbursement of loans to the Bank will be shared by the partners proportionate to their respective shares. The rest of the required finances will likewise be shared by the partners in proportion to the shares each party holds.
It should be noted that IDRO will help facilitate the acquisition of bank loans and credits.
After receipt of a partnership proposal from the private sector, IDRO will embark on the establishment of the said joint stock corporation and the implementation of the projects. This is provided that the technical/economic feasibility studies of the project have been finalized and the results have met the approval of IDRO. Otherwise, a Memorandum of Understanding will be signed between the two parties and the final feasibility studies will be assigned to a consultant. The costs for this feasibility studies will be borne and paid by the IDRO; however, such costs will be shared proportionate to each party's shares when the partnership comes into effect.
Should the cost of the technical/economic feasibility studies is expected to exceed 500,000,000 Rials, the costs will be shared as from the start proportionate to the shares of each party.
Once the industrial unit has been commissioned, its market has been stabilized, and the future of the company is secured (three years from commissioning), IDRO will transfer its shares to its partners at prices estimated by pertinent experts.
Should the partners be unwilling to buy the IDRO's shares, they will be offered for sale at the Stock Exchange Market.
Minimum investment in such projects for partnership should be no less than 220 billion Rials.
Regarding high-tech projects and underdeveloped regions, the said amount might be adjusted at the discretion of the respective Deputy Managing Director.