Islamabad: Federal Cabinet Directs Steps to resolve LDI/3G Licence & PTCL Real Estate Disputes with Etisalat
Federal Cabinet has reportedly directed an inter-ministerial committee, headed by Minister for Privatisation Waqar Ahmad Khan to take immediate steps to resolve the dispute with UAE-based Etisalat over the issue LDI/3G spectrum licence to China Mobile Pakistan, official sources told Business Recorder.
In September 2010, the Cabinet had constituted a committee under the Privatisation Minister to resolve 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.
The committee was given two weeks to implement the decision. However, the committee failed to make progress to resolve the dispute due to which Etisalat has withheld millions of dollars, to be paid to the government, with regard to PTCL.
The committee had also been directed to resolve the LDI licence, auction 3G spectrum and PTCL real estate issues, in consultation with the stakeholders and the concerned Ministries/Divisions. According to sources, Federal Cabinet reviewed implementation on its decisions on January 26, 2011 and expressed concern over the delay in resolution of such a thorny issue despite passage of seven months.
“While dilating upon the pending implementation decision on the reservations of Etisalat of UAE on the issuance of LDI/3G spectrum licence to China mobile, the Cabinet on January 26, 2011 directed the committee constituted for this purpose to come up with the report/update in the next Cabinet meeting, and take immediate steps for amicable resolution of the issue,” sources said.
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 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.
In August, 2010 Ministry of Information Technology, in its summary to the Cabinet, had said 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 GoP and company 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 GoP 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.
(Published in Daily Business Recorder on Feb 2, 2011)