Pakistan, Etisalat in talks to resolve $800 million PTCL payment row

KARACHI: Pakistan and the United Arab Emirates are in talks to resolve a fourteen year deadlock with Emirati telecommunications company Etisalat involving a pending $800 million bill from the privatization of Pakistan Telecommunication Company Limited (PTCL), a senior Pakistani official said on Friday.
An Etisalat consortium bought a 26-percent stake in PTCL for $2.6 billion in 2005 that gave Etisalat majority voting rights. The UAE firm paid an initial $1.80 billion as per the deal terms, which also included transferring ownership of the properties to PTCL from the government. It was due to pay the remaining $800 million in six twice-yearly instalments of $133 million.
The UAE operator owned 90 percent of the acquiring consortium, giving it a 23.4 percent stake in PTCL.
But the Abu Dhabi-listed operator has since withheld $800 million because the government did not transfer title of some properties to PTCL as per the deal terms.
“Talks are going on with Etisalat management,” Federal Secretary of Information Technology and Telecom Shoaib Ahmad Siddiqui told Arab News. “Efforts and deliberations are in process to amicably resolve this issue. We will further engage the company for a sustainable solution to the issue,” 
Federal Minister for Information Technology Dr. Khalid Maqbool Siddiqui said on Wednesday that the government was willing to fulfill all legal requirements for the recovery of the dues.
“Both countries have brotherly relations,” he said, “but Pakistan will fight for its rights.”
Of the 3,500 properties destined for PTCL, all but 34 have now been handed over to the former telecom monopoly, according to Pakistan’s Ministry of Privatization. Pakistan’s official position is that the remaining 34 cannot be signed over due to ownership complications and so the value of these properties will be deducted from the amount Etisalat owes.
Earlier this year, former secretary of Pakistan’s privatization commission, Rizwan Malik, informed the Senate Standing Committee on Information Technology that PTCL’s asset management wing had mistakenly mentioned 3,384 properties in the privatization agreement that was finalized in 2006, though it only had 3,248 properties.
Pakistani officials maintain they have provided a list of all properties to Etisalat with details of why the remaining 33 properties could not be transferred to PTCL.
Last year, Pakistan’s privatization ministry even hinted it would take the issue to the international court of arbitration to recover the dues from Etisalat.