Home » Pakistan, Telecom » Etisalat, 3G Auction: Govt Fails to Raise Revenue of $1.6 billion

etisalatThe incumbent government, which has two days to complete its five-year tenure, has failed to generate the budgeted non-tax revenue of $1.6 billion on account of Etisalat and auction for 3G spectrum. The government had budgeted $850 million on account of auction of 3G and $800 million on disbursement by Etisalat for privatisation of Pakistan Telecommunication Company Limited (PTCL) in the current fiscal year.

Chief of Etisalat met Prime Minister Raja Pervez Ashraf in December last year and was requested to release the amount owed for PTCL privatisation. Etisalat remained firm in its stance and linked the release of payment to the transfer of all agreed properties. At the time of privatisation of PTCL, there were as many as 3,248 properties to be mutated in favour of PTCL. Of these, 3,117 have been transferred till date leaving 131 outstanding properties which include 32 public and 99 private.

The Prime Minister had also constituted a task force comprising Finance Division, Privatisation Commission and Ministry of Information Technology to negotiate with M/s Etisalat for an early settlement, however after the passage of three months, the committee is yet to meet.

The auction for 3G spectrum has been delayed thrice since the former Prime Minister Yousuf Raza Gilani approved 3G policy on November 23, 2011. On December 23, 2011 auction date for 3G was announced while on January 23, 2012 Information Memorandum for 3G was issued. However on January 26, 2012 some legislators questioned 3G licence prices and moved to stop the auction and on March 7, 2012 3G auction was postponed.

On August 13, 2012, following the directives of Auction Supervisory Committee (ASC) constituted by the then prime minister, PTA re-initiated the process of hiring consultant and on November 8, 2012, proposed the name of Interconnect Communication, a UK-based company, as consultant for 3G auction process. At the same time the Authority proposed the formation of Independent Advisory Group (IAG) for 3G auction. The ASC supported the PTA proposal and recommended that instead of consultant, IAG comprising experts/consultants of international repute should be hired for the auction process.

On the directives of ASC, PTA initiated the process for third time and hired IAG comprising experts/consultants of international repute to auction 3G spectrum. However, the National Accountability Bureau (NAB) raised objection for not following Public Procurement Regulatory Authority (PPRA) rules in the process, and the authority had to cancel the contract and delayed the process for an indefinite period.

Currently, the authority is working without a chairman, while there is only one member as opposed to three. Member Finance of the Authority retired on February 24, 2013, and the Member Technical is going to retire on March 15, 2013. Meanwhile, Lahore High Court (LHC) has terminated the services of Muhammad Farooq Awan, Chairman of the Authority on the plea that the appointment was illegal and not in accordance to laws. One week ago the government placed Farooq Awan, as Member Finance of the authority on deputation, but LHC once again restrained him from working in any official capacity.

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