Pakistan takes up $800 million outstanding dues issue with Etisalat

Hamza Habib Our Correspondent

23rd Sep, 2021. 07:58 pm

ISLAMABAB: The government has once again taken up the issue of an outstanding amount of $800 million with Etisalat against the privatisation proceeds of the Pakistan Telecommunication Company (PTCL) outstanding for over 14 years.

Federal Minister for Finance and Revenue Shaukat Tarin held a virtual meeting with Hatem Dowidar, Group CEO of Etisalat International at the Finance Division on Thursday.

The finance minister underscored the significance of resolving outstanding issues and moving ahead for a sustainable solution with all the stakeholders onboard.

Tarin also called for setting up a mechanism for fair assessment of properties by hiring internationally renowned evaluation companies.

Dowidar agreed to this proposal and affirmed to have evaluation of properties completed within a couple of months. The participation of Etisalat in the recent auction of spectrum in Pakistan affirms its commitment to Pakistan’s telecommunication sector, he said.

Both sides agreed to proceed ahead for the resolution of all outstanding issues between Etisalat and the Privatisation Commission in a spirit of goodwill.

Finance Minister Tarin said that the United Arab Emirates (UAE) is one of the major economic partners of Pakistan. The expatriates from Pakistan, settled in the UAE, contribute significantly through remittances to enhance the foreign currency reserves.

Pakistan attaches great value to the brotherly relations with the UAE and intends to further strengthen business and trade linkages between the two countries, he added.

Sources in the Privatisation Commission said till now the UAE’s Etisalat is not willing to pay more than $300 million against $800 million proceeds.

The sources said the meeting was told that Etisalat had offered to pay around $275 million and now it may stretch it to $300 million to wind up the lingering matter.

Pakistan had previously asked Etisalat to deduct around Rs9 billion ($60 million) of the total $800 million.

The dispute between the government of Pakistan and Etisalat had come down to the 33 properties whose titles could not be transferred in the name of PTCL.

The sale deed required the dispute over properties to be settled through valuation of assets by both sides. In case of difference over valuation, the valuation by Etisalat has the preference under the deed, unless the matter is taken up for arbitration.

The technical services agreement (TSA) of PTCL with Etisalat also did not have a legal life after it expired in 2011 and revised up to 2014.

The PTCL’s asset management department had originally provided inaccurate and fundamentally flawed records on its properties, as it owned only 3,248 properties but had mentioned 3,384 in the privatisation agreement finalised in 2006.

The government, which still had 62 per cent stake in PTCL, has now provided the list of all 3,248 properties to Etisalat with details why the remaining 33 properties could not be transferred to PTCL.

Etisalat had made upfront payments of $1.4 billion in a couple of installments but then stopped the remaining amount of $800 million on the premise of non-transfer of all properties in the name of PTCL.

According to Etisalat, the number of non-doable properties was not 33 but 363 based on the list provided by the asset management department of PTCL as part of the sale-purchase agreement. The properties could not be transferred in the name of PTCL because they were either partially-owned, rented out, owned by provinces but occupied by the federal government, or were not owned by PTCL in the first place.

The government sold 26 per cent stakes of PTCL to Etisalat with the management control in 2005 at the price of $2.6 billion. However, because of a dispute on PTCL properties, Etisalat withheld the payment of $800 million.

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