Chairman, Privatisation Commission (PC) Muhammad Zubair said on Wednesday that privatisation process in the past was not transparent and the agreement signed with Dubai-based Company M/s Etisalat which acquired PTCL shares was not perfect.
He gave this statement before the Senate Standing Committee on Commerce headed by Senator Syed Shibili Faraz during discussions on the proposed corporatization of State Life Insurance Corporation (SLIC).
Chairman PC gave a categorical assurance to the committee that the government has no plans to privatise the entity.
Different aspects of HBL and MCB privatisation also came under light discussion. “I explained on a number of occasions that the real culprit in deal with M/s Etisalat was Government of Pakistan (GoP) not the buyers,” he added.
According to Chairman PC, total deal was for $1.6 billion and a large number of properties were not under PTCL control however the Government of Pakistan gave a commitment to the buyers that 500 properties will be transferred to them.
The PTCL deal also envisaged the company making quarterly payments and all the properties to be transferred by January 2008 but by that time not a single property was transferred to the buyers who had already paid $400 million out of $1.6 billion.
However, the company stopped payment on the remaining unpaid amount of $800 million, he added. “Etisalat had all the right as the GoP had an agreement with the company but did not meet the basic requirements,” he continued.
When he assumed the charge of Chairman Privatisation in December 2013, nothing was transferred to Etisalat except four or five properties.
According to the Etisalat, the contract was already void and they were not obligated to make any payments because GoP had to transfer properties by January 2008 but had practically not done anything.
“We requested them to keep the contract open and give us an opportunity to transfer properties now,” he further added.
Zubair said the incumbent government transferred all the properties to M/s Etisalat within one and a half years except 31 properties which could not be transferred.
Those properties are in FATA, Defence, Cantonment, Karachi and far flung areas and some properties do not have any documentation.
It was also written in the agreement that if any property is not transferred both parties would appoint their own valuators and whatever value would be determined, higher of the two with consensus, would be deducted from the remaining amount, Zubair stated.
“It is an international agreement and the government had to meet all these requirements. In September 2015 Pakistan appointed its own valuators and Etisalat its valuators and the two have finalised valuations,” he said.
Zubair said he would not disclose the value of properties evaluated by Etisalat’s valuators because the figures were not reported but confirmed that their valuation is far higher than Pakistan’s.
“If we accept their valuation which we are bound to according to the agreement then the reaction in Pakistan would be that the government has sacrificed the national exchequer,” he further maintained.
He maintained that the government wants everybody to understand what was in the agreement.
“GoP did an imperfect agreement despite knowing that there will be difficulties in transfer of properties,” he said.
Chairman Standing Committee maintained that the buck should stop somewhere and responsibility for the imperfect agreement be placed on some one.
Chairman PC agreed but explained that the officials at that time would claim that the treasury benefited by $400 million.
In reply to a question, Muhammad Zubair said that a couple of months ago, he contacted Etisalat on this issue, adding that both parties are on the same page now.
However, he revealed that since Dubai’s ruling family is a shareholder in Etisalat, PC is seeking political intervention at the level of Prime Minister or Finance Minister.
When asked why the government was showing $800 million as non tax revenue in the federal budget, Muhammad Zubair said that the amount was being shown in budgets for the last seven or eight years.
“We used to balance our budget by including $800 million but at the end of the year the country’s fiscal deficit ballooned.
That amount was not expected to be released yet included in the figures to balance the budget,” he maintained.
In reply to a question, Muhammad Zubair said that the Privatisation Commission has not made any commitment to corporatize SLIC to any international financial institution nor prepared a Corporatization Bill for SLIC.
“Finance Ministry and Commerce Ministry have reached an agreement with the World Bank that SLIC’s corporatization will be done,” he added.
The issue of National Tariff Commission (NTC) also came under discussion. Committee condemned the Ministry of Finance and Establishment Division for not finalising the NTC rules which are necessary to make the organisation functional.
The officials of Commerce Ministry informed the committee that interview process of new five members of the NTC has been completed and a summary would be sent to the Prime Minister in a day or two, and expressed the hope that the Commission would be fully functional by the end of this month as committed by the Secretary Commerce.
The committee cleared the SLIC Bill 2016 which will be tabled in the forthcoming session of National Assembly.
The meeting was attended by Seantor Ilyas Bilour. Senator Karim Khawaja and Senator Rubina Khalid.
However, Senator Karim Khawaja and Robina Khalid did not utter a single word during the meeting. -Business Recorder