Failure in solving 3G licence, Etisalat issues: government relying heavily on borrowing
By: TAHIR AMIN & ZAHEER ABBASI
The government would be heavily relying on borrowing to finance the fiscal deficit, which is expected to increase significantly in the current fiscal year due to the inability to generate the budgeted non-tax revenue of $1.6 billion on account of Etisalat and auction of 3G spectrum.
Sources said that the high ups of Finance Ministry were no longer optimistic about the auction of 3G at $850 million in the current fiscal year and disbursement of $800 million by Etisalat for privatisation of Pakistan Telecommunication Company Limited (PTCL). The chief of Etisalat recently held a meeting with Prime Minister Raja Pervez Ashraf where he was requested to release the amount owed for PTCL privatisation. Officials say that Etisalat remained firm in its stance and linked the release of payment to the transfer of all agreed properties.
PM also requested Etisalat chief to participate in 3G auction. Etisalat has reportedly refused to accept the government of Pakistan’s proposal of valuing outstanding proprieties and deducting the amount from the $800 million owed. The PM has also taken note of the undue pendency of the matter and has formed a task force comprising of Finance Division, Privatisation Commission and Ministry of Information Technology to negotiate with M/s Etisalat for an early settlement. At the time of privatisation of the PTCL, there were a total of 3248 properties to be mutated in favour of PTCL. Of these, 3117 have been transferred till date leaving 131 outstanding properties which include 32 public and 99 private. Out of the total 99 private property holders, 20 have gone to court which has created hurdles in handing over the remaining properties.
Sources said that sale of 3G license is considered highly unlikely in the current fiscal year because of the government’s failure to hire a consultant as well as ongoing tussle between the chairman Pakistan Telecommunication Authority (PTA) and member Finance and Technical. The process for hiring of consultant has been delayed for a third time as the required criterion for hiring of consultant was not fulfilled which led to objections by National Accountability Bureau (NAB). As a result, the PTA cancelled the contract awarded to three consultants and now the process has to reinitiate for hiring of consultant. The consultants have also expressed reluctance to carry on work with PTA and the foreign consultant hired for Rs 50 million with Rs 10 million cheque issued in his favour has not been able to cash it.