Senators hold PC responsible for non-recovery of $800m of PTCL privatization (Pakistan Observer)

The Senators mostly from opposition political parties have termed the non recovery of remaining $ 800 million from the privatized Pakistan Telecommunication Company Limited (PTCL) as irreversible and irreparable loss to national kitty. In June 2005, The Privatization Commission sold 26 per cent PTCL shares to the UAE telecom giant for $2.59 billion with management rights. Etisalat paid $1.799 billion and withheld the remaining $799.3.4 million because of the governments’ failure to meet all conditions.
Talking to Pakistan Observer; PPP, ANP, JUIF and even PML (Q) Senators held the former and sitting management of the Privatization Commission (PC) as sole responsible for making such a disastrous deal of selling the worthy national assets on the cheapest possible price.
“The Privatization Commission fixed some key objectives of privatization including to improve the operational efficiency and overall performance of privatized entities, to promote competition, to reduce the financial burden imposed upon the Government by public enterprises, to release resources for utilization on alternate urgent requirements such as those of the social sectors and the development of physical and technological infrastructure, thereby accelerating the pace of industrialization, to promote and strengthen the capital market by broadening and deepening its base through enlarging the number of shareholders and listing new enterprises, but unfortunately PC has not achieved a single objective out of privatization of PTCL” Talha said observing, on the contrary it inflicted loss of billions of rupees to the national exchequer.
He said that PC high officials prepared such a flawed privatization agreement just to damage the national interests for the sake of interests of few individuals and even today, the concerned management was responsible for non recovery of remaining amount. He said that the privatization deal of PTCL with Etisalat was not transparent and made in violation of rules and procedures. He added that PC under the flawed agreement included those properties and lands which were owned by federal or any provincial government rather either those are private properties are under litigation in the list of properties around 3,500 properties to be transferred to Etisalat.
Commenting on the same subject ANP Senator Haji Adeel observed that Finance Ministry had been made helpless by the influence of the Chairman PC Muhammad Zubair. Actually, the Chairman PC is responsible for not recovering the outstanding amount from Etisalat and reason behind his lenience is his close contacts with the royal family of United Arab Emirates (UAE)” Haji observed demanding of the government to look into the reported closeness of Zubair with UAE Royal family because it was inflicting devastating losses to the national economy. He recalled that said that the legal advisors had asked the previous government to scrap full of flaws deal otherwise it would be considered contrary to rules.
“Three successive governments, including the present one, have failed to recover $ 800 million outstanding payment from the buyer of the Pakistan Telecommunication Company Limited (PTCL) since April 2006” he strongly criticized the federal governments over their executive failures in receiving the outstanding sum. PPP Senator Sardar Fateh Muhammad Muhammad Hassani while giving his views on the said subject said that the issue obstructing the payment was transfer of the remaining 43 properties to Etisalat which had to be done by January 2008 as per the original agreement between the government and the buyer.
Ironically, the governments have been showing the money yet to be recovered in federal budgetary estimates. Under the share purchase agreement (SPA), the payment of the balance amount was contingent upon transfer of clean and clear titles of 3,248 properties by January 2008. Senator Hassani said that Etisalat withheld payment of $800 million on the excuse that all properties had not been transferred in the name of PTCL and this excuse was provided by no one else but the Privatization Commission itself. He said the PC management had been abusing the (Confidentiality and Secrecy of Documents) Regulations 2003 with malafide designs to prevent the government or any of its agencies from scrutinizing or investigating the privatization of an entity after one year of its completion that was why no inquiry had been initiated into the said deal.
“No doubt, under the agreement, SPA can’t be changed, but what about the government officials who apparently helped seal such an unfair deal because of which we are still waiting for our money,” he said, adding that the government should at least point out weak areas which had not been addressed at the time of PTCL privatization and make them part of the official record for the purpose of future transactions. “After the passage of nine and half years of privatization of PTCL, not only have the government failed to recover the full price from Etisalat ($800 million is still outstanding), but in various payments and opportunity cost, it has paid back almost all the amount it received from Etisalat (Technical fee, opportunity cost of delayed payments, redundancy payments)” lamented the PML Senator from Balochistan Saed ul Hassan Mandokhel while giving vent to his sentiments on the subject.
He observed that he had convinced the Etisalat to come to a deal on the issue of nontransferred properties in he past but Privatization Commission had erected hurdles in this connection. Now the situation has worsened to the extent that government is helpless neither can cancel the deal nor can receive the receivable amount” added. It is pertinent to note here that in a recent briefing to the Senate Standing Committee on Finance the Finance Secretary Waqar Masood had also reiterated firm resolve of the government to receive the said outstanding amount but in the same meeting the Senators challenged him pinpointing the Privatization Commission as the main hurdle in this regard.