ISLAMABAD, June 20: Prime Minister Shaukat Aziz on Monday said the Rs155.158 billion proceeds of 26 per cent shares of the Pakistan Telecommunication Company Limited (PTCL) would not be utilized for social sector and development but for reducing the fiscal deficit as well as bank borrowing.
Talking to reporters after presiding over a meeting of the cabinet committee on privatization, the prime minister said: “The CCOP has accepted the highest bid of Etisalat (of the UAE) for 26 per cent stake and management control of the PTCL.”
The CCOP directed the Privatisation Commission to immediately issue letter of acceptance to Etisalat so that it could deposit the 25 per cent amount within 14 days and the rest of the money in 60 days. After two months, Etisalat would take over PTCL’s management control.
Subsequently, the Privatisation Commission formally issued the letter of acceptance (LOA) to Etisalat to deposit its bid money to take over the PTCL management by the end of August.
The prime minister said the one-off proceeds “are not utilized for development” but for underlying expenditure to reduce the government’s fiscal deficit and bank borrowing.
The new fiscal year’s budget deficit has been forecast to top Rs285 billion.
The UAE group had offered the highest bid of Rs117 ($1.96) per share in Saturday’s bidding to acquire 26 per cent stake in Pakistan’s telecom utility at a bid price of Rs111.158 billion.
The prime minister said three major telecom players participated in the PTCL bidding which was in fact a vote of confidence in Pakistan’s economy and its future potential.
He said Etisalat was a leading regional player and growing its share in the regional countries. China Mobile Corporation made its first bid outside the country which also showed its close political relationship with Pakistan. SingTel is also a major world player and took part in the bidding.
“We think the price received by the government reflects true value of the company and all stakeholders would benefit from the transaction,” Mr Aziz said.
He said the employees would benefit because they would get a lot of openings in Etisalat which was making investment bids in many other countries. The people at large would benefit because of better services and tariffs.
He said the Privatization Commission handled the PTCL transaction in a very professional manner and hoped it would do the same in the future disinvestment of Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), National Investment Trust (NIT) and Pakistan Steel Mills (PSM).
Responding to a question, he said the commitment given to the PTCL employees about their job security would be fully honoured.
Minister for Privatisation and Investment Dr Abdul Hafeez Sheikh said that the second highest bidder - Hassan Associates - had been approached by the Privatisation Commission to match the highest bid and take over the Karachi Electric Supply Corporation (KESC). He said the question relating to Saudi group, Kanooz Al-Watan, stood closed.
When told that the consortium led by Hassan Associates was not ready to match the highest bid of Rs20.14 billion, Mr Sheikh said legally they had 30 days to match the bid and nothing could be done before that deadline. APP adds: Mr Aziz said the government had allocated Rs30bn in the budget to improve the road network by 2007.
He said communications had a vital role in accelerating economic growth and high priority was being accorded to improving the road infrastructure in the country. He said the government was laying emphasis on improving roads in the southern Punjab.
He said the National Highway Authority (NHA) had been tasked to construct a four-lane Multan-Muzaffargarh-D.G.Khan road.
He said the NHA would also extend the motorway from Faisalabad to Multan besides starting work on a four-way road from Khanewal to Lodhran.
The prime minister also approved provision of electricity to 50 villages of Muzaffargarh, in the constituency of Shahid Jamil.