Finance Minister Hafeez Shaikh had taken up the matter with a senior UAE minister for an immediate release of at least $500 million against transfer of about 98 per cent of government properties within 10 days. -File Photo

In return, the government has made a firm commitment to the Etisalat that it would transfer all the company's properties to the new owners within 10 days, a senior official at the ministry of finance told Dawn.

Informed sources said the government had already lost a tranche of $900 million from the IMF because of its failure to raise electricity tariff by six per cent with effect from April 1, 2010, and the finance ministry was finding it difficult to meet a revised fiscal deficit target of 5.3 per cent of GDP. The government will now be increasing power tariff by about 7.5 per cent with effect from July 1 to bridge a shortfall arising out of delayed tariff increase.

Because of a dispute with the Pakistan government over the legal transfer of land and property titles, the Etisalat of UAE has been holding back payment of about $800 million of the $2.6 billion PTCL's privatisation proceeds to Pakistan for about three years now.

The government had sold about 26 per cent shares along with management control of Pakistan's largest telecom operator in July 2005 when Dr Abdul Hafeez Shaikh was privatisation minister in the Musharraf government.

The official said that Finance Minister Hafeez Shaikh had taken up the matter with Sheikh Nahayan Al Mabarak, a senior UAE minister and owner of Abu Dhabi group, for an immediate release of at least $500 million against transfer of about 98 per cent of government properties within 10 days.

The official said that there were a total of 3,298 properties that were required to be transferred to PTCL, but provincial governments and some owners of private properties had declined to give up the ownership of 310 properties that became a bone of contention between the government and Etisalat.

The UAE firm stopped payment of $800 million of PTCL proceeds and took the position that it would not make full payments unless all properties were transferred to PTCL.

He said that soon after becoming finance minister, Dr Shaikh had raised the issue with Prime Minister Yousaf Raza Gilani and got his approval for resolution of the dispute by transferring all properties to the PTCL. As a result, 99 properties in Punjab have now been transferred to PTCL. Another 17 properties belonging to the federal government organisations but in possession of PTCL would be transferred within seven days under a decision of Prime Minister Gilani.

The official said that about 118 properties belonged to private persons whose market value was very small while cases of another 18 properties were under litigation. The official said that the finance minister had also promised with Shaikh Mabarak that remaining 57 properties located in the Sindh would be transferred within next 10 days.

As a result, the overall properties, accounting for more than 98 per cent out of a total 3,298 properties, have either stood transferred or were under the process of transfer, to be completed within the next 10 days.

Finance Minister Hafeez Shaikh, the official said, had asked Sheikh Nahayan Al Mabarak, to either transfer privatisation proceeds due from Etisalat in proportion to the percentage of properties transferred or at least remit about $500 million out of outstanding $800 million before the end of the fiscal year on June 30 to help Pakistan conclude its budget accounts within the permissible fiscal deficit target agreed to with international lenders.