Bureaucratic glitch: PTCL receivables of $33m from India hit a snag

KARACHI:

Bureaucratic intervention has once again deprived the inflow of foreign exchange into the country. Former IT secretary Farooq Awan has delayed the recovery of $33 million owed by India to Pakistan Telecommunication Company Limited (PTCL).

PTCL is the central point of international calling traffic coming from and going to different countries around the world including India. PTCL’s network is used as a transit point in routing calls to India.

Since 1947, PTCL – now a subsidiary of UAE telecom giant Etisalat – has been handling these transactions with Indian telecom companies including state-owned fixed line operator Bharat Sanchar Nigam Limited (BSNL), Reliance and Bharti Airtel, the broadband giant said in a statement.  The transaction cost between PTCL and BSNL amounts to $33 million from 1947 to 2012.

Successive governments since the creation of Pakistan have failed to recover these dues, an official close to the matter said.

PTCL has taken various measures including arbitration to recover the money especially in the past four years, he said.

The former federal secretary – who has now been appointed as Pakistan Telecommunication Authority (PTA) Chairman – delayed the process by creating doubts about the actual claimant, the official said.

The official said Indian Parliament had sanctioned the agreed payment last year. On November 9, 2011, the Indian High Commission (IHC) wrote to the Foreign Office requesting a verification of PTCL’s claim and asked if there are any other claimants.

The Foreign Office forwarded the query to Ministry of IT and Telecom, however, they did not receive a reply. The IHC sent three reminders while Foreign Office sent five reminders to the former IT secretary but the latter did not respond until June 22, delaying the recovery of these hard-fought dues for six months, the official said.

Had Awan sent a proper response before the end of Indian fiscal year on March 31, the payment would have made it to PTCL’s account long time ago, the official said.

Making matters worse was Awan’s reply to the foreign office and the IHC June 22. The secretary’s response not only halted the payment but also confused Indian authorities, the official said.

“Since PTCL is not the sole beneficiary of the amount, therefore, the amount should be transferred to the Government of Pakistan immediately,” reads the letter – Awan’s wrote in response to IHC’s query.

The letter, which is available with The Express Tribune, also said that the Auditor General of Pakistan would facilitate by deputing a special team to work out the claim of PTCL for settlement of outstanding receivables.

Had the secretary endorsed PTCL’s claim – to be the sole claimant – India would release the payment and all the stockholders, including the government that has 62% stakes in PTCL, would automatically get their share, the official said.

“The person who cost us $33 million will now be responsible for 3G auction that’s worth about $1 billion,” the official said, adding, “Supreme Court should take notice of the issue before he could do further harm to the nation.”

Farooq Awan did not respond to the queries, however, his office did send an acknowledgment of the receipt of the questions.

PTCL, too, refused to comment on Awan’s response. “We are not in a position to comment on this,” said PTCL’s General Manager for PR Ammara Durrani.

The broadband provider, however, emailed its official statement on the matter, which describes it as the sole claimant of the amount.

“If PTCL network is the transit or termination point for an international call coming into Pakistan, then it will be PTCL’s receivables,” it said. “For international calling traffic between Pakistan and India, PTCL is the origin as well as the transit point,” it added.

PTCL has international calling traffic transactions with more than 160 countries of the world, making it an important source of earning foreign exchange. The broadband giant contributed more Rs1.5 billion to the national exchequer for six months ended December 31, 2011.

Awan’s response, however, almost cost it $33 million by putting the matter in pending once again, the official said.

Published in The Express Tribune, August 4^th, 2012.

Correction: An earlier version of the story incorrectly stated "$33 billion" instead of "$33 million" in the last line. The error is regretted.