A high-level UAE delegation is due in the federal capital in the next few days where the matter pertaining to government of Pakistan-Etisalat is likely to be resolved, said Secretary Privatisation Rizwan Malik. "The government is actively pursuing the long-awaited outstanding privatisation matters, including K-Electric and the PTCL, which would set a new tune for investors by restoring their confidence," said Malik while briefing the Senate Standing Committee on Information Technology and Telecommunication.
The committee met here with Rubina Khalid in the chair on Wednesday where Privatisation Division briefed the committee about the privatisation of PTCL along with sale purchase agreement.
Malik admitted that due to lack of proper homework for identifying properties by the departments concerned, the issues created for the government of Pakistan. During the last high-level interaction, it was evident that Etisalat has shown interest to resolve the matter amicably.
According to the agreement, in case of non-transferable properties, both the sides would independently evaluate its prices and the highest would be adjusted. According to Pakistan''s side, the remaining 34 properties have a value of $87 million as made by independent valuers, which was also shared with Etisalat and the escrow agent. However, Etisalat shared its findings with the escrow agent but not with the government of Pakistan, the secretary added.
Giving details of the sale purchase agreement, Malik said that three parties participated in the bidding process on June 18, 2005. A consortium led by Etisalat emerged as the highest bidder by bidding far above the reference price of Rs 62 per share, as approved by the Cabinet Committee on Privatisation (CCoP).
The CCoP in June 2005 approved the sale of 26% B-class shares of PTCL to M/s Etisalat, and the Sale Purchase Agreement (SPA) was signed in June 2005, which lapsed in September 2005. After approval by the Cabinet and the CCoP, a modified SPA was executed in March 2006, which incorporated certain amendments, including mutation of 3,384 properties in favour of PTCL with clean and clear titles.
As SPA, Etisalat made an upfront payment of $ 1.4 billion in April 2006 against the total bid amount of $ 2.598 billion. Whereas the balance payment of US$ 1.2 billion, to be paid in nine (09) biannual instalments, was contingent upon transfer of clean and clear titles of 98% properties by January 2007 (First Shortfall) and 100% properties by January 2008 (Second Shortfall).
Despite the fact that the government of Pakistan (GoP) could not mutate the properties by the stipulated deadlines of the First Shortfall, Etisalat paid initial three (03) instalments totalling US $ 40 million by July 2007. Etisalat has not paid any instalment since January 2008, the Second Shortfall deadline.
During the period of 2008 to 2015, PC continued the efforts to mutate the properties in the name of PTCL and in January 2015 the PC informed Etisalat and the escrow agent, appointed for the PTCL transaction, that all transferable properties have been transferred to the PTCL, however, the remaining 34 properties cannot be transferred to PTCL due to various reasons, including legal impediments. The list of these 34 properties and their assessment, as made by independent valuers, was also shared with Etisalat and the escrow agent.
The GoP/PC has been reiterating that the payment of "outstanding" amount of US $ 800 million is to be resolved independently and cannot be associated with other matters, and due to renewed relationship and commitment expressed at the ministerial level to amicably resolve such long outstanding issue, the GOP and Etislalat are at an advanced stage of negotiations for an early resolution of the outstanding matter, Rizwan Malik added.
The committee lambasted the Ministry of Information Technology and Telecommunication by not implementing its recommendations about paying pensions to the PTCL employees and warned that in case of non-implementation by January 15, privilege motion would be moved against the authorities concerned.
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