News Desk |
Pakistan is likely to get $800 million arrears from the Etisalat. The Senate Standing Committee on Information Technology and Communications was apprised on Wednesday by Minister for Information Technology (IT) Khalid Maqbool Siddiqui headway was anticipated in the retrieval of $800 million from Etisalat.
In 2005, Etisalat had acquired 26% share of Pakistan Telecommunication Company Limited (PTCL) for $2.6 billion and $800 million payment has remained pending to the government on account of non-transference of properties and other disputes since 2008.
The matter was presented before the Privatisation Commission board that had constituted a three-member committee comprising Ashfaq Tola, Aziz Nishtar and Zafar Iqbal Sobani.
Mr Siddiqui was answering the queries from the members of the Senate committee regarding non-payment of increase in pensions to over 40,000 ex-PTCL employees since 2010. In July 2005, Etisalat had bought 26% shares in PTCL with management control at a price of $2.6 billion. After coming to know the second lowest bid was actually $1.4 billion, the UAE-based firm tried to backtrack from the offer.
Then Privatisation Minister Abdul Hafeez Shaikh persuaded the company by offering it to make an initial payment of $1.4 billion and the remaining amount in nine installments until September 2010. Moreover, he committed to transferring the properties owned by PTCL to Etisalat.
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Pakistan served a second shortfall notice to Etisalat in September 2015, informing the company that it cannot transfer the remaining 33 properties and that it would have to pay the outstanding dues by adjusting the value of these properties, according to secretary privatisation.
The secretary said that according to Pakistan’s assessment the value of these properties was not more than $88 million. But according to the agreement, the highest value determined by any of the two parties will be the final price of the properties.
Mr Siddiqui was answering the queries from the members of the Senate committee regarding non-payment of increase in pensions to over 40,000 ex-PTCL employees since 2010.
In June, Pakistan is considering taking Etisalat to the London Court of International Arbitration over non-settlement of $800 million worth of outstanding privatisation proceeds of Pakistan Telecommunication Company Limited (PTCL). “The Ministry of Privatisation and the office of Attorney General of Pakistan have completed necessary consultations,” a top official of the privatization ministry told media sources.
However, the official said before formally approaching the international court, the last chance would be given to the United Arab Emirates to resolve the issue on a government-to-government basis.The non-settlement of dues also delayed the finalization of the Privatisation Commission’s financial accounts for the fiscal year 2013-14.
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The Privatisation Commission’s external auditor, KPMG Taseer Hadi & Co, has also raised the issue of outstanding receivables amounting to $799.307 million from Etisalat, according to minutes of the board meeting. The matter was presented before the Privatisation Commission board that had constituted a three-member committee comprising Ashfaq Tola, Aziz Nishtar and Zafar Iqbal Sobani.
Some of the members were of the view that Pakistan should stop dividend payments to Etisalat. But the privatization ministry was of the view that under the sale-purchase agreement dividends could not be stopped. However, the government’s recent estimation of receiving the arrears is welcome news as it could help boost the telecom sector.