3G licence auction: Regulator to work out modalities afresh

Appointment of consultant unnecessary, may delay March 29 auction.

ISLAMABAD:

Prime Minister Yousaf Raza Gilani on Friday directed Pakistan Telecommunication Authority (PTA) to work out fresh modalities for auction of 3G licence after finding that the watchdog worked against government’s policy directives.

Credible sources told The Express Tribune that the PTA was found working against the policy guidelines issued for the auction of 3G (third generation) licence. The premier gave the directive while chairing a meeting of the Auction Supervisory Committee here at the Prime Minister House.

Participants of the meeting noted that the 3G policy did not talk about appointment of a “transaction manager” for which the PTA has advertised and sought expressions of interest by March 26. The policy only allowed the PTA to hire a consultant of international repute that the PTA misinterpreted as “transaction manager/international consultant”, said an official on condition of anonymity.

The meeting also noted that appointment of a consultant after completing the required preliminary work and even finalising the base price of $210 million for 3G was unnecessary. The PTA’s decision to appoint an international consultant or transaction manager that too after publishing the information memorandum may result in missing the deadline of March 29, set for auction of 3G licences, he added.

He said the PTA and the Ministry of Information Technology would hold a meeting to work out fresh modalities and then present them to the premier for a final decision.

PTA Chairman Dr Moham­mad Yaseen did not respond to questions in this regard.

“The PTA should conduct the process in a manner aimed at meeting timelines,” the premier was quoted as directing the PTA.

The meeting had been convened to address issues related to auction of Instaphone and 3G licences. After announcement of the auction plan, the parliamentary committees and the media have raised questions over transparency, timely completion, competitiveness and the government’s bid to give 4G spectrum licences free with 3G licences. The government is targeting to arrange Rs75 billion through these auctions to bridge the gap between its expenditures and incomes. It has largely restricted bidding to existing players, an obligation that arises out of the sale-purchase agreement of 2006 between the government of Pakistan and Etisalat – the 26% shareholder in Pakistan Telecommunication Company Limited (PTCL).

The government is expected to complete the auction by March 29. However, the expressions of interest invited by the PTA for hiring an international consultant by March 26 may make it impossible to complete the process by March 29.

A PTA official said on condition of anonymity that the auction would have to be postponed and the deadline no more sounded reasonable. There were no official words as to why the international consultant was not hired earlier.

Another senior government official said the PTA had been asked to address transparency concerns and take people into confidence about the process. He said if the need arose the government may consider the PTA proposal of bypassing the international bidding process to meet the deadline of March 29 by invoking emergency clause of the Public Procurement Regulatory Authority Rules 2004. However, he said the PTA has to justify that through a formal summary to the premier.

According to an official handout issued by the PM House, the prime minister called for ensuring transparency and professionalism in the proposed auction and it should be completed within scheduled time.

In the meeting, the progress on the auction of 3G spectrum was discussed in detail and it was emphasised that due bidding should take precedence over all other considerations which were in the interest of all the stakeholders, it added.

Published in The Express Tribune, February 25^th, 2012.