Prime Minister Imran Khan has directed Advisor Finance and Revenue, Dr. Abdul Hafeez Shaikh, to approach United Arab Emirates’ (UAE) government for payment of the remaining $800 million from M/s Etisalat, sources revealed.
These directions were given in a meeting of the economic team, where different issues relating to the economy were discussed. Dr. Hafeez Shaikh held the portfolio of Privatization Minister when 26% of PTCL’s shares and management control were sold to M/s Etisalat.
Originally a 100% state-owned corporation, the shareholding of government-owned PTCL shares was reduced to 62% after 26% shares and control were sold to Etisalat Telecommunications, and the remaining 12% was sold to the general public in 2006 under an intensified privatization program during the tenure of Prime Minister Shaukat Aziz.
Last year, Asad Umer while presiding over a meeting of Cabinet Committee on Privatisation (CCoP), decided to sell the remaining shares of PTCL. However, the decision has not yet been implemented.
Etisalat has withheld $799.3 million because of the non-transference of some PTCL properties in Sindh and Punjab to PTCL.
PTCL was privatized through the sale of 26% shares for $2.6 billion, to be paid in nine equal installments payable on a biannual basis. As per the Share Purchase Agreement (SPA), the GoP is required to provide a clean title of 100% of PTCL properties (3384 in number) by January 12, 2008. Payment of the balance sum of $1.198 billion was dependant upon transferring all titles to properties in question.
Three further installments of $133 million were paid by the buyer upon transfer of the corresponding number of properties. In the event of non-fulfillment of this obligation, GoP is obliged to nominate a list of non-transferred properties to the buyer where after GoP and buyer will separately appoint property valuators to determine the value of said properties. The valuations have been procured.
After these valuations, the buyer had the option to surrender the right to the use of non-transferred properties and deduct the estimated value from balance payments or withhold such payments until the titles to the properties are transferred.
To ensure timely completion of the transfer possession of the properties in question, GoP constituted a steering committee headed by Secretary, Ministry of Information Technology (who is also Chairman of the PTCL Board of Directors).
However, a balance of 161 non-transferred properties (including 71 in Punjab and 45 in Sindh) remains outstanding and consequently the installments ($133.218 million each) due on March 12, 2008, and September 12, 2008, were withheld by the buyer. Etisalat had paid a total of $1.799 billion and the balance of $799.3 million remains.
Previous administrations have raised this issue at the highest level with UAE rulers but no final agreement has been reached.