Unpaid fees: 3G consultants at loggerheads with PTA

Auctioning process may also be entirely put on hold till a settlement is reached on the payment issue, says Official.

KARACHI:

The country’s never-ending journey towards acquiring 3G cellphone technology appears to have taken yet another step backwards with consultants hired by the Pakistan Telecommunications Authority (PTA) for auctioning 3G licences initiating legal action against the telecom regulator over the non-payment of their fees.

The auctioning process may also be entirely put on hold till a settlement is reached on the payment issue, while legal action in British courts is also on the cards, said an official.

The legal action means PTA is liable not only for the unpaid fees – which amounts to Rs50 million or $0.5 million – but also for the legal costs associated with the case, consultants told The Express Tribune in a press release.

The lawsuit is a fresh blow to the federal body that has failed to launch the much-awaited technology on three occasions last year, despite already wasting Rs20 million in public funds for hiring 3G consultants.

On November 23, 2012, PTA had hired Rob Nicholls from the Australian law firm Webb Henderson; Dennis Ward, the former spectrum auctioneer for the Canadian Spectrum Management Program; and Martin Sims from the spectrum specialists PolicyTracker to assist in auctioning 3G licences.

However, PTA Member Finance Nasrul Karim Ghaznavi and Technical Khawar Siddiq Khokhar had initially opposed the appointments of these consultants. Khokhar and Ghaznavi maintained that their former chief Farooq Awan had hired these consultants against the law, adding that their advice was not requested at any stage of the process.

This opposition led to an internal turmoil within PTA with Awan and Khokhar and Ghaznavi at loggerheads.

The issue then came on the radar of the National Accountability Bureau (NAB) when it raised questions on December 21 about the process being adopted for auctioning 3G licences in the country.

“The NAB finds hiring of consultants for 3G/4G Spectrum (modern cellular phone technology) licences’ auction not in line with the Pakistan Procurement Regulatory Authority rules,” NAB spokesman Zafar Iqbal had said.

PTA eventually terminated the concerned contracts later in December, 2012.

The 3G consultants didn’t react to this breach of contract initially as they wanted to complete the auction instead, The Express Tribune reported on January 13. In the meantime, they made several attempts to contact PTA but no one talked to them, according to a source familiar with the matter.

As a result they have now engaged three Pakistani lawyers Waqqas Mir, Aiyan Bhutta and Umar Khan to take legal action against PTA and recover the money. The lawyers have already served a legal notice to PTA, the source said, adding that they are looking at a range of options including taking legal action in the UK against the “cheque fraud”, which is a criminal offence.

They are also looking for a civil recovery option. The consultants’ lawyers may also consider putting on hold the 3G auction till the issue is settled, the source said. Before their contracts were cancelled, the consultants had completed more than half of the work at their own expense – including a lengthy stay of 10 days in Pakistan – the PTA didn’t confirm this development until January 14, they said.

The consultants said they were not paid a penny for the work they had done. They were given individual cheques by the PTA for 10% of the agreed fee, but those could not be cashed as PTA had already cancelled them.

“This is cheque fraud, pure and simple, and punishable by a jail sentence under Pakistani law,” said consultant Martin Sims. Consultant Rob Nicholls said they would pursue every option available to them until they are paid.

“The contract cancellation letter sent by the PTA was ridiculous,” the press release said quoting Dennis Ward as saying. It claimed that the contract was void ab initio, a legal term meaning invalid at the outset, the statement said.

“That is something only a court can decide,” said Ward. “The PTA is legally obliged to honour contracts. It can’t appoint itself judge and jury and suddenly decide to pull out,” he said.

“PTA seems to be more influenced by politicians and lacks confidence as a body,” said an official who wished not to be quoted. The official, however, said the consultants are professionals and may still consider finishing the job, if PTA can negotiate with them.

“The PTA is being cavalier with public money,” said Rob Nicholls. “Instead of adopting this ‘head in the sand’ approach it should make an arrangement to settle its debts and bring us back after the election to complete the auction.”

Published in The Express Tribune, February 19^th, 2013.