ISLAMABAD – Pakistan is confronting long-standing dispute with UAE telecom giant Etisalat over unpaid dues that originally stood at $800 million but have now surged to nearly $6 billion due to delays and penalties. The issue resurfaced at a sensitive time as Abu Dhabi seeks repayment of $3.5 billion in deferred loans, prompting renewed calls within Pakistan to recover the outstanding amount.
Transparency International Pakistan (TIP) pushed government over $800 million unpaid amount from Etisalat after 2005 privatization of Pakistan Telecommunication Company Limited (PTCL) which now exploded to nearly $6 billion due to mounting penalties and prolonged delays.
The watchdog’s alarm comes amid escalating financial pressure, with United Arab Emirates demanding repayment of $3.5 billion in deferred debt. TIP has called on Prime Minister’s Adviser on Privatization, Muhammad Ali, to order Pakistan Telecommunication Authority to immediately recover the overdue funds from Etisalat before the losses spiral further.
TIP revealed that the issue was first flagged before Pakistan’s Supreme Court one and half decades back, when the debt was already $1.6 billion. Years of inaction allowed principal to balloon while racking up an estimated $1.5 billion in penalties from a 2% annual charge over seven years.
Officials confirmed that this high-stakes issue was discussed earlier this year in UAE during top-level talks involving Ishaq Dar and senior UAE officials, including Etisalat representatives. TIP is now demanding a formal review and urgent recovery strategy, warning that regulatory failures and delays have inflicted enormous financial damage, creating one of Pakistan’s most severe economic crises in decades.
Pakistan is bracing for major hit to its foreign exchange reserves as it prepares to repay $3.5 billion to United Arab Emirates this month, just days after clearing a $1.3 billion Eurobond obligation. The massive outflow threatens to strain reserves that currently stand near $16.4 billion, potentially putting Islamabad at risk of missing targets under its $7 billion programme with the International Monetary Fund.
Officials said UAE deposits, rolled over since 2018, will now be settled in full, raising fears of pressure on the rupee and Pakistan’s fragile economic recovery.
