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Your special correspondent has alleged that the Government is to sell a 26 percent stake in PTCL for $3 billion by the first week of April. He/she also mentions the existence of a short-list topped by a middle eastern company. There are several glaring inaccuracies in the report:

1) Since the Privatisation Commission (PC) has not yet advertised for Expressions of Interest (EOI), there is not, nor can there be, any short list. All that exists now is a list of potentially interested parties who have approached the Privatisation Commission for information regarding PTCL. The Financial Advisors, who have done soft marketing of the company internationally and whose written report is expected shortly, is likely to have its own list.

2) As neither the valuation of the company has been finalised, nor a decision taken on the percentage of the company that will be offered, any statements with respect to the price or the stake to be offered are purely speculative. Moreover, $3 billion is the amount of proceeds the Government expects to receive during the next 18 months from its entire privatisation programme. It is wishful thinking to speculate that we can find an investor willing to place $3 billion in one company in Pakistan today.

3) The idea that the company will be sold next week is even more incredible. If all goes well, we expect to advertise for EOI in April, proceed to bidding by July, and close the transaction by the end of the year.

4) While the article mentions the advantages of unbundling PTCL before privatisation, it fails to mention the disadvantages or to mention alternative ways of meeting the objectives mentioned. First, minority shareholders of PTCL may well be able to block the unbundling if they believe it will diminish the value of their holdings. Second, even if the Government were able to reach agreement on shareholder compensation, past experience of breaking up PTCL and WAPDA has shown that the unbundling process could take years. In the meantime, the country would have foregone the additional investments, better management practices, and quicker responses to consumer needs that the private sector would bring. At the same time, the value of the company would have reduced further. Third, concerns with respect to coverage and quality of service are largely unwarranted given that the sector will be opened to competition shortly. However, any remaining concerns can easily be addressed in the sale contract, which will specify coverage targets and service standards. Issues of coverage of poor areas or cross-subsidies are also more easily addressed with an integrated company.

In future, it would be useful if your correspondent could contact the PC to verify the veracity of such allegations before publishing them. He/she is doing a grave injustice to the country and the journalist profession.