Key Takeaways:
- Pakistan opts for diplomatic resolution over legal action in $800 million PTCL dispute with UAE’s Etisalat
- The dispute stems from a 2005 deal where Etisalat acquired a 26% stake in PTCL
- Several state-owned entities, including PIA and Roosevelt Hotel, are on the active privatization list
- Pakistan Steel Mills has been removed from the privatization list
Diplomatic Approach to PTCL Dispute
In a significant development, Pakistan has decided to forgo legal action in its protracted dispute with the United Arab Emirates (UAE) over a substantial sum related to the privatization of Pakistan Telecommunication Company Limited (PTCL). The conflict, which has persisted for 16 years, involves $800 million in outstanding payments from a 2005 deal where Etisalat, a UAE-based telecommunications company, acquired a 26% stake in PTCL.
The dispute’s complexity is underscored by discrepancies in the transfer of properties to PTCL. While Pakistan claims 34 properties were not transferred, the UAE contends the number is 94.
During a recent briefing to the Senate Standing Committee on Privatization, Privatization Ministry Secretary Jawad Paul confirmed that Pakistan would not pursue litigation to resolve the dispute. Instead, officials are optimistic about reaching a breakthrough in the coming months through diplomatic channels.
Complex Nature of the PTCL Deal
The dispute’s complexity is underscored by discrepancies in the transfer of properties to PTCL. While Pakistan claims 34 properties were not transferred, the UAE contends the number is 94. Senator Talal Chaudhry, who chaired the committee meeting, pointed out that the original sale agreement includes clauses favoring the buyer, which limits Pakistan’s ability to take legal action.
Ongoing Privatization Efforts
The committee also received updates on the privatization status of several state-owned institutions. Secretary Usman Bajwa outlined the active privatization list, which includes Pakistan International Airlines (PIA), Roosevelt Hotel, House Building Finance Company Limited (HBFCL), and First Women Bank Limited. These entities are expected to be privatized within the current fiscal year.
Notably, the sale of First Women Bank Limited is being pursued under the G2G Act with the UAE government. However, a competitive bidding process might be necessary as the potential buyer is not directly owned by the UAE government.
Power Sector Privatization Plans
While the power sector, known for its significant losses, is not included in the first phase of privatization, there are plans to initiate the privatization of four power generation companies in a phased manner. The initial focus will be on efficient plants.
Removal of Pakistan Steel Mills from Privatization List
In a separate development, the committee was informed that Pakistan Steel Mills has been removed from the privatisation list and returned to the oversight of the Ministry of Industries.
Challenges and Concerns
Committee members expressed dissatisfaction with the lack of major strategic asset sales over the past 15 years, highlighting the need for more effective privatization strategies.
