It was also said that license fee payable for a new license would be discounted by potential bidders in their valuation on the one hand and paid by the PTML to the PTA on the other.
The privatisation commissioned informed in its summary, that the PTCL privatisation was being processed within the realms of existing legislative and regulatory framework, but there were concerns regarding the continuing obligations of the company. Because of deregulation policy or security safeguards, they were being dealt with through two modes, ie, incorporation in the transaction document, where possible, as well as formal agreements between the PTCL-GHQ and PTCL-NTC to take into account obligations of the PTCL in this respect.
Sources said the PTCL had forwarded a draft agreement to the GHQ but they did not receive reply on the issue so far, while an agreement has been executed with the NTC.
The PC also argued that it was imperative that all such agreements should be finalised at the earliest, so that bidders could review them for valuation and IT & Telecom division may be directed to cooperate in this regard, sources maintained.
PROPOSED AMENDMENTS: A draft bill agreed between the IT & Telecom division and the PTA amending the 1996 Act is in advanced state of finalisation. Bidders have also identified certain issues, which require certain legislative amendments. In this connection, reference has been made to the IT & Telecom division to incorporate proposed amendments regarding arbitration and different classes of shares in their summary for the cabinet. However, amendments in the Public Investments (Financial safeguards) Ordinance, 1960 (XLVI of 1960) to grant exemption to the company post-privatisation and exemption from the Removal from Service (Special Powers) Ordinance 2000 (Act XVII of 2000) are proposed to be part of the finance bill 2005.
CHANGES IN LICENSE OF PTCL: In order to allay concerns regarding non-uniformity of licenses, it was proposed that the existing PTCL license might be reviewed for changes.
The license was the most important transaction document from the bidder's perspective. The provision of a final agreed draft license at the earliest was essential from the bidder's perspective.
Several meetings had been held on the issue. The PTA has provided a draft, integrated license to the PTCL for agreement, which would be forwarded to the FAC for final review and finalisation.
The license agreed to between the PTA and PTCL post-comments from the FAC should be adopted and issued to the privatised PTCL.
CHANGES IN LICENSING OF PTML: The IT & Telecom division was of the view that the PTML be issued a cellular license on same terms and conditions as new cellular market players. It was observed that the PTML was not in favour of change in license, as it would have serious financial impact on the company.
It is also observed that as a matter of principle the policy should also be implemented on other cellular players, who are currently not under the new licensing regime.
The steering committee for PTCL privatisation recommended that the issue of necessity or otherwise of obtaining a new license may be referred to the CCoP for a decision.
EMPLOYEES: The status of employees as civil servants and the perceived inability of the company to manage the work force under its own rules and regulations continue to be a matter of concern for potential bidders.
The consensus of the PTCL steering committee, which was held on April 11, was that at this stage of the privatisation process, it would not be advisable to go for an amendment in this respect in the act.
As per the decision of the steering committee, a legal opinion has been solicited from the law division on the interpretation of Section 35 and Section 36 of the 1996 Act.
The matter was referred to the law division and their response is awaited in the matter.
A package is being developed for employees in line with the past policy on such matters. Employees are being engaged and it is expected that this package may be announced depending upon their co-operation.
The government has also approved amendments in the following PTCL rules:
I. Section 22(2) of the Pakistan Telecommunication (Re-organisation) Act, 1996 relating to arbitration by CLA.
II. Section 35 and 36 of the Pakistan Telecommunication (Re-organisation) Act, 1996 relating to terms and conditions of service of all current and future employees of the PTCL.
III. Section 37 of the Pakistan Telecommunication (Re-organisation) Act, 1996 relating to section 90 of the Companies Ordinance 1984.
IV. Exclusion of the PTCL from the purview of Public Investments (Financial Safeguards) Ordinance 1960.
V. Exclusion of the PTCL from the purview of Removal from Service (Special Powers) Ordinance 2000.
VI. Statutory notification for the exemption of all items to be procured by the PTCL from the purview of Public Procurement Regulatory Authority Ordinance 2002 and the Public Procurement Rules 2004.
VII. Migration of GSM license of Pak Telecom Mobile Limited.
It was interesting to note that the ministry of information technology and telecom was of the view that the PTML license was revoked and a new license be issued in the form issued to both Telenor and Warid while this proposal was opposed by all other public stakeholders.
In a discussion in the privatisation commission, it was argued that there is no credible rationale in law or practicality to necessitate PTML to give up its present license, which is valid until 2013, for a new license, because the Mobile Cellular Policy 2004 is not a policy directive to the PTA, nor does section of the 1996 Act permit the government to direct PTA to shorten the term of the existing license.
The cellular policy only contemplates that existing participants will be encouraged to migrate under the purview of the policy. Indeed if compliance with the cellular policy is the goal then other participants should also have new licenses. It is a self-defeating exercise to affect the PTML migration while leaving other 'islands' operating outside the purview of the cellular policy.
The CCoP agreed with arguments of the privatisation commission and the PTCL and rejected the proposal, saying all pending matters should be resolved before the bidding date, sources concluded.