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The privatization of Pakistan Telecommunication Company Limited (PTCL) in 2005, once hailed as a landmark deal, remains a defining and unfinished chapter in Pakistan’s economic history. Two decades later, the $2.6 billion transaction between the Government of Pakistan (GoP) and UAE-based telecom giant Etisalat still hangs in limbo due to disputes over property transfers and pending payments.
As new settlement proposals emerge, both sides appear closer than ever to a potential resolution, though major hurdles remain.
A Two-Decade Standoff Over Property Transfers
Etisalat acquired 26% of PTCL’s B-class shares and management control under a deal approved by the Cabinet Committee on Privatization (CCOP). The sale agreement required Etisalat to make staggered payments, tied to the transfer of thousands of PTCL-owned properties with clear titles.
However, delays in title verification and incomplete property transfers derailed the process. The government failed to meet several transfer deadlines, prompting Etisalat to withhold nearly $800 million from its original payment commitment. The Sale Purchase Agreement (SPA) clearly stated that disputes would be handled by the London Court of International Arbitration, but years of negotiations and correspondence have yet to yield an outcome.
Recent documentation reviewed by officials shows renewed efforts to end the stalemate. A new non-binding proposal outlines revised valuations and a drastically rationalized list of disputed properties. Both Etisalat International Pakistan (EIP) and the government have now agreed on 33 “shortfall” properties.
According to the latest figures, EIP values these assets at Rs. 31.1 billion (US$138.3 million), while the government pegs their worth at Rs. 9.2 billion (US$41.02 million). The new list also removes 26 deleted entries and more than 200 duplicate or nonexistent properties. As a result, EIP estimates the outstanding amount has dropped to around US$536 million, compared to the earlier figure of US$799 million.
EIP has further requested that PTCL be formally classified as a private sector company after privatization, a proposal that could trigger significant regulatory and parliamentary review. Other issues under discussion include rent-free property usage, technical service agreements, and valuation of disputed sites.
Settlement Talks and Broader Implications
Documents analyzed for this report, including seven official correspondences and valuation breakdowns, reveal active communication between both parties. These papers show continued efforts to narrow property lists, reassess valuations, and avoid further escalation through international arbitration.
Negotiations now focus on reaching a balanced settlement that satisfies both sides. Officials say that if no agreement is achieved, the dispute could again head toward legal proceedings in London.
The PTCL-Etisalat case remains one of the most closely watched privatization disputes in Pakistan’s history. Its outcome will likely shape investor sentiment toward future state asset sales and determine how the country handles foreign investment disputes.
While progress has been made, a final resolution remains elusive. The coming months may prove decisive in closing a chapter that has tested Pakistan’s regulatory credibility and Etisalat’s patience for nearly twenty years.
