New Committee Meeting Today Resolving Disputes With Etisalat

Privatisation minister Waqar Ahmad Khan has been given the responsibility of resolving the longstanding dispute with Etisalat of UAE on the issuance of Long Distance International (LDI) licence to China Mobile Pakistan (known as Zong), and auction of 3G spectrum, official sources told Business Recorder.

“A new committee has been constituted by Prime Minister Yousuf Raza Gilani to resolve the LDI licence, auction 3G spectrum and PTCL real estate issues, in consultation with the stakeholders and the concerned. Ministries/Divisions,” they said. The convenor of the new committee would be Minister for Privatisation, whereas Minister for Finance, Minister for Petroleum, Minister for Interior and Advisor to Prime Minister on Information Technology would be its members.

The committee, which will have to submit its report to the Cabinet within two weeks, will hold its first meeting on September 28. Earlier, the government had decided to approach Etisalat International, which owns 26 percent of the shareholdings of the PTCL, to seek its consent for the issuance of long-distance international (LDI) licence to China Mobile.

Etisalat has withheld payment of a tranche of about 780 million dollars because of the failure of the government to transfer property in Punjab and Sindh in favour of PTCL. Etisalat is contesting the anticipated award of LDI licence to China Mobile as a breach of the shares purchase agreement (SPA) and guarantees given to it, sources added.

The Cabinet, in its meeting on August 5, 2009, had constituted a ministerial committee, comprising Minister of Privatisation, Minister for Interior, Minister for Overseas Pakistanis, Finance Minister and Advisor to Prime Minister for Petroleum and Minister of State for Law and Justice and Secretary of Ministry of Information Technology as Secretary of the committee, to look into the matter.

In August, the Ministry of Information Technology, in its summary to the Cabinet, had apprised it that Etisalat International had agitated that (in the light of SPA schedule-6 clause-g), issuance of subject licence to China Mobile Pak would be violative of the SPA concluded between the government of Pakistan and Etisalat on March 12, 2006. The issuance of licence was approved by the Cabinet on September 24, 2008, but the decision has not been implemented thus far due to Etisalat’s concerns. On the other hand, China Mobile Pak is pressing for implementation of the decision. Keeping in view the sensitivity of the issue, the Minister of Information Technology (MoIT) had proposed that: (i) the government of Pakistan may take up the issue with Etisalat for seeking one-time consent for issuance of LDI licence in favour of China Mobile PAK; and (ii) if deemed necessary, fresh policy directive for placing a moratorium on issuance of fixed line (LL and LDI) and cellular licences for the remaining time of commitment with Etisalat may be issued.

Sources said that the committee had held a meeting to discuss the issue holistically, and to examine legal ramifications of the SPA. The subject issue was thoroughly deliberated and it was resolved that since this issue was likely to cause legal implications, including invoking of arbitration clause, the mechanism proposed by the MoIT, and endorsed by Ministry of Law and Justice and Board of Investment (BoI), may be adopted. However, it was decided that the final draft of both letters would be sent to Etisalat for consent and the new policy directive for the PTA would be cleared by the Minister for Privatisation, who is also convenor of the committee.

Sources said that the Law and Justice Division, on MoIT’s request for vetting, had opined that such “non-statutory instruments in nature of official correspondence do not need legal vetting by the Law Division”. The committee, headed by the then Minister for Privatisation, (now Petroleum Minister) Naveed Qamar, failed to resolve the dispute with Etisalat, after which the Prime Minister has constituted a new committee.

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Category: PTCL, Telecom News