Islamabad: Pakistan is considering international arbitration against Etisalat, a UAE-based telecommunications company, over an outstanding payment of USD 800 million from the sale of Pakistan Telecommunication Company Limited (PTCL), along with its opportunity cost since 2008 and applicable damages.
The matter was discussed at a joint meeting of the Senate standing committees on information technology and privatisation Tuesday, the Dawn newspaper reported.
In the meeting, the members were informed that the Office of the Attorney General for Pakistan (OAGP) had been directed to implement the federal cabinet’s decision under Rule 24 of the Rules of Business, 1973, at the earliest, the report said.
However, senators from both committees expressed surprise that they were not given access to the sale purchase agreement (SPA) concerning the divestment of 26 per cent shares in PTCL, along with management control, to UAE-based Etisalat International Pakistan (EIP).
The meeting was jointly chaired by Senator Dr Afnanullah Khan, chairman of the Senate Standing Committee on Privatisation, and Senator Palwasha Khan, chairwoman of the Senate Standing Committee on Information Technology and Telecommunications.
According to a briefing submitted by the Ministry of Privatisation, the government sold 26 per cent shares in PTCL, along with management control, to Etisalat in 2005 for USD 2.59 billion.
Of this amount, USD 1.76 billion was received, while approximately USD 800 million remains unpaid.
The briefing said the payment was linked to the transfer of PTCL properties to the new management. Although 99 per cent of the properties had been transferred, 32 of the total 3,246 properties remained untransferred.
Etisalat, now known as e&, has continued to withhold the outstanding USD 800 million because of the non-transfer of these properties.
The ministry said the government had made extensive efforts since 2015 to resolve post-privatisation issues, including the formation of several committees and negotiations with Etisalat for an amicable settlement.
However, the dispute remained unresolved, prompting the government to constitute another committee in July this year, headed by the adviser to the prime minister on privatisation. The committee included representatives of the ministries of IT and law and the OAGP.
Considering the 20-year history of the dispute, the committee recommended that Pakistan consider international arbitration, as provided under the SPA, to recover the outstanding USD 800 million, along with its opportunity cost since 2008 and applicable damages.
It also recommended that the attorney general assess the strength of Pakistan’s case, its prospects of success and the associated legal implications.