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April 20, 2019

Pakistan, UAE reach understanding over $800mln row

Business

April 20, 2019

ISLAMABAD: UAE-based telecom firm Etisalat has agreed to release an outstanding payment related to its acquisition of state-owned PTCL after holding back amount on non-transferred assets from $800 million stuck for over a decade, a senior official said on Friday.

Secretary Privatisation Rizwan Malik told The News that Etisalat agreed to evaluate non-transferred properties and would deduct the amount from unpaid $800 million.

“The company would also conduct physical verification of properties whose ownership titles have already been transferred in the next three months,” Malik said.

Etisalat acquired 26 percent shares of Pakistan Telecommunication Company Limited (PTCL) along with the management control in a privatisation deal of $2.6 billion back in 2006 when the newly-appointed Adviser to the Prime Minister Imran Khan on Finance Hafeez Sheikh was the privatisation minister.

The Middle East telecom giant, however, paid only $1.8 billion to Pakistan at that time with the remaining amount to be paid in nine installments.

The dispute emerged when ownership titles of 34 properties were not transferred to the telecom company. Islamabad doesn’t want to transfer these properties to Etisalat for legal reasons.

The foreign firm was earlier insisting that all the properties must be transferred to PTCL. So far, 3,214 properties titles have been transferred to the shares acquirer.

Sources said senior officials of Etisalat held a meeting earlier this week with the Privatisation Commission’s officials and informed them that it hired a legal firm Khan Associates for valuation of the 34 properties.

In January 2015, the Finance Ministry wrote a letter to the escrow account agent of London-based HSBC Bank, saying that 3,214 properties had been transferred to PTCL, while remaining 34 couldn’t be transferred due to various reasons, including legal impediments.

It was also informed that independent valuators determined financial worth of the properties at $92.4 million, according to the letter, titled ‘second shortfall properties’, available with this scribe.

The $800 million have been lying in the escrow account for over a decade and it would be transferred to Pakistan after the settlement of the issue.

Secretary Malik further said the government would be able to complete some privatisation transactions, including SME Bank Limited, First Women Bank Limited, 1,223 megawatts Balloki Power Plant, 1,230MW Haveli Bahadur Power Plant, Mari Petroleum Limited (divestment of remaining shares), Jinnah Convention Centre, Islamabad and Services International Hotel by the yearend.

Earlier, Malik told the Senate Standing Committee on Privatisation that the government was making efforts to ‘amicably’ resolve the issue with the UAE’s company. The committee met with Senator Mir Muhammad Yousaf Badini in the chair.

The committee was also informed about the privatisation of four federal lodges in Murree with area of 16.8 kanals, which was sold in 1997.

It was told that the Privatisation Commission determined its value at Rs82.311 million, while it was sold at Rs42 million through open bidding, which was not a profitable transaction.

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