Dispute with Estisalat: Hafeez-led body yet to finalise recommendations

The ministerial committee, headed by Finance Minister Abdul Hafeez Shaikh, is yet to finalise recommendations to resolve the longstanding dispute with Estisalat, which has withheld $800 million, official sources told Business Recorder. Prime Minister Yousaf Raza Gilani recently constituted a third committee to resolve the dispute with Etisalat.
"The committee has met only once, and the next meeting is expected to be held after the Finance Minister returns from his ex-Pakistan leave," sources said. The budget for 2011-12 has set a target of Rs 70.4 billion from privatisation proceeds during the current fiscal year. Analysts believe that the economic managers came up with this amount in anticipation of the resolution of the dispute with Estisalat that would account for 68.4 billion dollars of the total earmarked from privatisation proceeds in the budget.
Official documents available with Business Recorder suggest that while dilating upon the implementation status of the Cabinet decision pertaining to the issuance of 3G Spectrum and LDI licence to China Mobile Pakistan Limited (known as Zong) and resolving the real estate issues with Etisalat of UAE, the Cabinet reconstituted a committee comprising Minister for Finance (convenor), Minister for Water and Power, Minister for Privatisation and Minister for Petroleum and Natural Resources to discuss and finalise the report within 10-12 days and present it in the next Cabinet meeting.
Sources said that most of the properties in Punjab and Sindh have already been transferred to PTCL. However, about 100 properties are yet to be transferred out of 3000. These properties are basically given by the land owners voluntarily to the PTCL to install poles for telephone connections.
First committee had been constituted under the chairmanship of former Minister for Privatisation Waqar Ahmad. However, when he failed to achieve the goal, the chairmanship of the committee was handed over to the Interior Minister Rehman Malik which also remained unsuccessful in its task. A key issue is LDI/ 3G licence to China mobile (known as Zong) as Etisalat threatened to approach international court if GoP violates its agreement.
The government had made a commitment to Estisalat that it will not issue any new LDI licence for seven years. This restriction will end after a couple of years. 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 the 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.