The Senate Standing Committee on Privatization, chaired by Senator Shammim Afridi, reviewed the matter of Pakistan being unable to recover receivables amounting to $800 million from e& (Etisalat) nearly 17 years after the company purchased a management stake in PTCL.
Secretary Privatization Commission (PC) informed the committee that Etisalat has only made 3 payments while 6 installments remain outstanding. A total of $800 million is pending to date, he added.
Etisalat agreed to clear up to $1.8 billion till 2007 for the PTCL buyout, but then never made any payment and held around $800 million by saying that the Government of Pakistan has not transferred certain properties to PTCL.
According to the Privatization Commission, Etisalat was to pay $2.6 billion against a 26 percent stake and controlling rights of PTCL. Etisalat was given the option to clear $2.6 billion in installments, so it paid a lump sum fee of $1.4 while the remaining $1.2 billion was to be paid in 9 tranches.
As per the 2004 sale and purchase agreement (SPA), the Government of Pakistan was required to transfer 3,248 properties to the PTCL. The properties were leased, hired, and owned by the federal government.
Etisalat has not delivered $800 million and is holding over 407 million shares without making the pending payments over the last 12 years. Pertinently, PTCL has declared dividends and claimed technical service agreement fees since its privatization in July 2005.
Pakistan has time and again requested Etisalat to clear its dues by deducting the value of the outstanding payment, but Etisalat says that it will clear payment as per SPA in full only after the complete transfer of properties.
Despite this, the Privatization Commission has since then announced several times that its arrangement with Etisalat has been made and payment will be cleared soon, but nothing has materialized so far.
