A consortium led by Etisalat emerged as the highest bidder, offering far above the reference price of Rs 62 per share approved by the CCOP. An upfront payment of dollar 1.4 billion was made by Etisalat on April 12, 2006 against total bid of dollar 2.598 billion. Balance amount of dollar 1.2 billion was to be paid in nine biannual instalments starting from September, 2006 and ending in September 2010. Till date, Etisalat has paid dollar 1.799 billion including three instalments of dollar 133.218 million each. An amount of dollar 800 million was, however, subsequently withheld by Etisalat because Pakistan had failed to meet a key condition of the agreement of mutating 3248 properties in favour of PTCL with clean and clear titles.
The case has been lingering on for a long time with no resolution in sight. Out of the 3248 properties to be muted in favour of PTCL, 3117 have been transferred till date, leaving 131 outstanding properties still to be transferred. Of these, 32 are stated to be public while 99 are private properties. The major hurdle in the smooth transfer of the remaining properties is due to the fact that 20 private property holders have moved the court and obstructed the transfer. Raja Pervez Ashraf, Prime Minister of Pakistan, is reported to be very eager to resolve the matter and has recently met an Etisalat delegation led by its Group Chief Executive Officer. He has also formed a task force comprising Finance Division, Privatisation Commission and Ministry of Information Technology to negotiate with Etisalat for an early settlement. According to reports appearing in the Business Recorder on 25th December, 2012, the government has proposed to Etisalat to value the remaining properties and deduct the amount from the final payment but Etisalat has refused to accept the government's proposal on grounds that the value of the outstanding properties is quite high and they should be handed over as provided in the agreement.
We appreciate the efforts of the Prime Minister to settle the issue in one way or the other and also know that it was not the fault of the present government to enter into the agreement without the necessary detailed homework but the consequences of such cavalier attitude, whether on the part of the previous or present dispensation, towards privatisation process is immensely damaging to the image of the country.
Most distressing is the fact that the issue of Etisalat is not a solitary but one of the few jumbled cases, which speaks a lot about our confusion and frivolity towards an issue of huge public importance. Nothing is yet clear about the final settlement with Etisalat but the country is likely to lose financially and could also be accused of breach of trust. Etisalat could of course extract a heavy price from the country by forcing the government to offer other higher value properties or deduct much higher amount than the actual value of the remaining promised properties from the remaining balance of dollar 800 million.
Every business enterprise claims the best piece of flesh when it is in a good bargaining position. Another disturbing aspect is that our economic managers have not learnt the proper lessons. The Steel Mills and Reko Diq cases also fall under the same category, though for different reasons. In a situation like this, the country's credibility is bound to suffer in the international circles. This coupled with increasing energy shortages, poor law and order situation, rampant corruption, etc, would scare away foreign investors who would not like to bid anymore for the purchase of our remaining PSEs or offer very low prices due to the risks involved.
Keeping all these factors in view, we would urge upon the government not only to resolve the present issue with Etisalat as early as possible but also to put in place a sound mechanism which could guarantee a transparent and trouble-free privatisation process in future. Top most legal minds in the country need to be specially engaged to avoid the possibility of legal hitches in finalising the settlement.