KARACHI:
Pakistan and the United Arab Emirates (UAE) have finally resolved the dispute over the outstanding payment of $800 million under the privatisation deal for the Pakistan Telecommunication Company Limited (PTCL) in which the Emirates Telecommunication Corporation, branded trade name Etisalat acquired a 26% stake at a total cost of $2.6 billion in 2006, said the Adviser to Prime Minister on Textiles Dr Mirza Ikhtiar Baig on Saturday.
Speaking at a meeting of the Pakistan-UAE Business Council of the Federation of Pakistan Chambers of Commerce and Industry at the federation house, Baig said that Pakistan was going to forgo $100 million under the final settlement and will receive $700 million for tranches – securities offered as part of a transaction.
Etisalat withheld $800 million due to non-transfer of 136 properties in the name of the PTCL because of litigation and encroachments. “In lieu of the properties not transferred to PTCL because of pending cases, Pakistan will forgo $100 million and will receive $700 million,” Baig said.
However, he did not specify the period over which Pakistan is going to receive the outstanding payment.
Presenting the minutes of the 10th Pakistan-UAE Joint Ministerial Commission meeting held in Abu Dhabi on February 26-27 earlier this year, Baig said it was decided by the foreign ministers of both countries to undertake a thorough evaluation of the disputed properties to determine their net worth.
“Pakistan got the evaluation done by the National Bank of Pakistan (NBP). Its estimate of the net value was in the vicinity of $80 million. But Etisalat refused to accept it, and instead hired international surveyors for an independent evaluation. Their estimate is around $100 million,” he said, adding that the difference of $20 million in the estimates of the NBP and independent surveyors was not substantial.
In March, The Khaleej Times quoted Baig as saying that there were only two contentious properties in major Pakistani cities, as the rest of the disputed assets had already been cleared.
When The Express Tribune contacted PTCL, a spokesperson for the company refused to offer comment, saying it was up to the governments of Pakistan and the UAE to resolve the dispute. “It’s been a long-standing stance of the PTCL that the dispute over the outstanding payment of $800 million is something strictly between the governments. We have nothing to say in this regard.”
Etisalat paid $1.4 billion initially while the rest of $1.2 billion was scheduled to be paid in six equal biannual instalments.
An affiliate of UAE’s Etisalat, the PTCL is the third largest mobile operator in Pakistan and enjoys a 19% market share in the cellular phone market.
Published in The Express Tribune, July 29th, 2012.
COMMENTS (10)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Outstanding payment settlement issues are referred to the International Arbitration & Dispute Resolution clause, CSR, mandatory in transactions of M&A., privatizations, Should be dealt with the clauses, TOR of the international norms in the interest of buyer and seller and importantly CSR, and labor rights.
@Hafiz Shah Ali: Slap them with penalty for delayed payment.This is a commercial transaction
Do you really think that would have worked ? Thank your lucky stars that a settlement has been reached as otherwise they would dragged you lot thru a time scale that would have made you redundant and still had a case for over charging ! This is not Uncle Sam and Aid or funds for fighting WOT ! This is a business transaction, where they were conned in first place and groud rules were changed too !
only 100 million!!!!!!!!!!!!!! we can sacrifice our lives for so called Ummah!!!!!!!
@Usman Malik: where are you living....foreign companies are buying and purchasing in every countries. Please try to understand the nuances then comment. Comment for the sake of comment is foolishness.
@DevilHunterX : The fact that commissions can be extracted from these deals in universal in Pakistan. Just wait until the PTCL rates start moving up.
Adviser to Prime Minister on Textiles Dr Mirza Ikhtiar Baig.
What does Textiles have anything to do with Telecommunication?
$100 Million is not an chicken feed ! Its a saving of substance and lesson for Pakistan, that creative accounting does not work with hard nose business people !
Etisalat was taken for a ride in this deal ... framed in a very high class of "nausar baazi" typical of us :) .... choran nu pay gaye chor !!!!
Slap them with penalty for delayed payment.This is a commercial transaction
Only in my Pakistan an overseas company can actually come and buy our assets, paying us by actually earning from the same establishment! PTCL was always a profitable entity and we could have done so much by entering for example the African markets with it, but no - we don't have a visionary which actually thinks about this country in the long run!
Plus I hope someone in Pakistan still remember how we recently leased our prime agriculture land to Arabs. Essentially destroying a very lucrative export market for our Agri-produce!