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Pakistan seeks emergency $500 million from Etisalat
Cash needed after failure to raise electricity tariff.
June 19, 2010 10:34 by Samuel Potter
The Pakistan government is seeking an emergency payout of at least $500 million from Etisalat, reports Gulf News.
A senior official from the Finance Ministry reportedly told a local paper anonymously that the money is needed to avoid in a breach in the current year’s fiscal deficit target.
Etisalat, or the Emirates Telecommunications Corporation, holds a large number of shares in the Pakistan Tele-communication Company Limited. In return for the cash, the government has pledged to transfer all of the company’s properties to Etisalat within 10 days, says the report.
The original story said that the government has already lost a tranche of $900 million from the IMF because of its failure to raise the electricity tariff by six per cent as of April 1, and the Finance Ministry is finding it difficult to meet a revised fiscal deficit target of 5.3 per cent of GDP. The government will now be increasing the power tariff by about 7.5 per cent with effect from July 1 to bridge the shortfall arising out of the delayed tariff increase.
Because of a dispute with the Pakistan government over the legal transfer of land and property titles, etisalat has been holding back payment of about $800 million of the $2.6 billion PTCL’s privatization proceeds to Pakistan for about three years, says Gulf News.