According to the latest reports, Pakistan has recently turned down Etisalat’s $263m Settlement Offer for a privatization dispute. The amount offered is only one-third of the outstanding dues that’s why Pakistan asked the UAE’s telecom giant to double the amount.
Etisalat’s $263m Settlement Offer Rejected
Reports claim that the settlement offer by UAE’s telecom giant Etisalat is even lower than the price it was willing to pay six years ago. A delegation of Etisalat even met Finance Minister Ishaq Dar for the second time in two months in order to find a solution to the 17-year-old privatization dispute. The telecom company owes $800 million in privatization proceeds of PTCL. However, the Pakistani government has never taken the buyer to the international court of arbitration. The Ministry of Finance stated:
If you don’t know the story, then let’s dig into it. Actually, the UAE firm withheld money due to Pakistan’s inability to transfer the remaining 33 properties in the name of PTCL. The government of Pak committed it in 2005. The fact is that Pakistan has already transferred over 3,000 properties however, Etisalat did not pay any money out of the remaining $800 million. A government official even elaborated that Ishaq Dar was willing to settle the dispute at around $500 million in cash. Again, Etisalat did not immediately respond to the minister’s counter-offer. Over the years, many Pakistani cabinet ministers made counter-offers in order to resolve the matter but unfortunately, it is still pending.
The privatization minister Abdul Hafeez Shaikh even tried to resolve the matter by offering the company to make an initial payment of $1.4 billion and the remaining amount in nine installments until September 2010. Moreover, he also made a commitment in order to transfer the properties owned by PTCL to Etisalat. The fact was that many of the properties were not owned by PTCL or the federal government, a few belonged to the provincial governments. So, now the dispute is over two major properties located in Karachi and Multan. The value of the disputed properties was reported to be not more than $88 million. However, according to the agreement, the highest value determined by any of the two parties will be the final price of the properties. Reports claim that Etisalat did not share its valuation with Pakistan however, it was over $450 million. The UAE’s telecom company has submitted its valuation to the escrow account agent of HSBC Bank, London. Phone World