ISLAMABAD: The government and Etisalat met again on Thursday to settle $800 million in earnings from the sale of Pakistan Telecommunication Company Limited (PTCL), which have been unpaid for more than 13 years.
The conflict arose after the government failed to transfer all properties to the UAE-based corporation as agreed.
Etisalat International Chief Executive Officer (CEO) Hatem Dowidar underlined that the properties would be evaluated soon and expressed his willingness to invest more in Pakistan’s IT and Telecom sector.
According to a statement released by the finance ministry, the assertion was made during his meeting with Federal Minister of Finance and Revenue Shaukat Tarin.
During the discussion, both parties committed to work together in good faith to resolve all outstanding concerns between Etisalat and the Privatisation Commission.
The then-government inked an agreement with Etisalat in March 2006, requiring the PTCL to give over 3,384 properties to the business. However, there were only 3,248 properties on the ground, with 38 properties unable to be transferred.
The issue between the Pakistani government and Etisalat had boiled down to 33 properties whose titles could not be transferred in PTCL’s name.
Etisalat had offered to pay $275 million to settle the long-running dispute. Pakistan had earlier requested that Etisalat subtract around Rs9 billion from the $800 million amount. Etisalat has come up with a final counter offer of little more than $275 million after extensive discussions.
The selling deal stipulated that any property disputes be resolved by both parties valuing their assets. In the event of a disagreement about valuation, the deed gives preference to Etisalat’s valuation, unless the subject is addressed to arbitration.
After expiring in 2011 and being updated till 2014, PTCL’s technical services agreement (TSA) with Etisalat likewise had no legal life.
The PTCL’s asset management department had initially submitted false and fundamentally faulty information on its assets, claiming to hold just 3,248 yet mentioning 3,384 in the privatisation deal signed in 2006.
The government, which still owns 62 percent of PTCL, has now provided Etisalat with a list of all 3,248 properties, including with details, while the remaining 33 properties were unable to be transferred to PTCL. Etisalat had made $1.4 billion in advance payments over several instalments, but the remaining $800 million was halted due to the non-transfer of all properties in the name of PTCL.
Based on a list furnished by the PTCL’s asset management department as part of the sale-purchase agreement, Etisalat claims there were 363 non-doable properties, not 33. Because the properties were either partially owned, rented out, held by provinces but occupied by the federal government, or not owned by the PTCL in the first place, they could not be transferred in the name of PTCL.
The finance minister had previously stressed the importance of addressing unresolved concerns between Etisalat and the Privatisation Commission and moving forward with a long-term solution. According to the statement, he emphasised the importance of a fair assessment of properties as soon as possible.
Tarin also highlighted the opportunities for international investment in Pakistan, particularly in the rapidly rising IT and telecom sector, and stated that the government was providing a favourable environment and incentives to encourage foreign investment.
He stated that the United Arab Emirates (UAE) was one of Pakistan’s important economic partners, and that his country valued its brotherly connections with the UAE, intending to deepen business and trade ties between the two countries.
Federal Minister for Privatization Muhammadmian Soomro, Chairman Privatization Commission, Secretary Finance, and top officers were among those who attended the meeting.
