By IPS Correspondents
ISLAMABAD, Jun 21 2005 (IPS)

Pakistan’s sell-off of its state telecommunications company has lit a fire under the country’s languishing labour movement and sparked the creation of an anti-privatisation group of other civil society actors.

The successful bidder for Pakistan Telecommunication Company Limited (PTCL), the nation’s largest and most profitable state-owned entity, from amongst three potential buyers was Etisalat of the United Arab Emirates, which offered 1.96 U.S. dollars per share. The bid was officially accepted Monday.

Other offers came from Singapore’s SingTel (0.88 U.S. dollars a share) and, at 1.06 U.S. dollars, from China Mobile.

The 26 percent shares it bought will give Etisalat 58 percent of the voting rights on the PTCL management board.

While PTCL’s workers opposed the sale at any cost, others argue the government sold the crown jewel of its assets too cheaply.

“Only the value of real estate that PTCL owns, if calculated at the market price, runs into billions of rupees,” says Wahajus Siraj, who heads the country’s largest DSL service provider, Micronet Broadband, in an interview.

He was referring to the sale of two commercial plots in the Pakistani capital Islamabad earlier this year that alone fetched the government 10 billion rupees (166 million U.S. dollars) as compared to the 160 billion rupees (2.6 billion dollars) it earned from the telecommunications firm’s sale.

PTCL owns prime real estate in all major cities and towns of the country.

Although Siraj did not estimate PTCL’s worth, workers in the company’s labour unions say it was at least double what the government received. Still, the deal remains the most expensive sale in the country’s history.

The government has been selling its smaller sick units, which were nationalized during the 1970s, for some time.. But the disinvestment of public sector banks did not generate much controversy because of the attractive packages offered to their employees. The sale of PTCL, therefore, becomes a landmark.

The sensational deal followed months of agitation by the nine unions of more than 65,000 PTCL workers, who threatened to cut off the country’s telecommunications network.

A strong sense of ownership enabled them to unite against the sale, and now it appears their sense of personal loss could create problems for the new management.

Under pressure from workers, the government put off the bidding date earlier this month, persuading the unions to call off strike and sabotage threats after assuring them their demands would be met, including re-valuation of the company’s value.

But unexpectedly the government re-scheduled the bidding for Jun. 18, in violation of its pact with the unions, and ordered the military to occupy all installations of PTCL, whose landline subscribers number 5.05 million and cell phone users 10.54 million.

As many as 400 union leaders and active employees were arrested country-wide to ensure that the privatisation went smoothly.

Although most of the arrested workers were released after the bidding, the union leaders are still being retained for what government officials call ”negotiations”. Their detention also enabled the government to prevent a protest rally by PTCL workers and their families outside the parliament house in Islamabad on bidding day.

However PTCL employees managed to hold small demonstrations across the country to register their opposition to privatisation. “The PTCL covers 2,000 cities and small town in the country. There was not a single place where the employees did not protest on or before the day of the privatisation,” says Asim Sajjad Akhtar, who heads the People’s Right Movement, an umbrella organization for slum dwellers and trade unions.

The military take-over of the PTCL installations prevented the protesting workers from severely disrupting the company’s services. However, unidentified men were able to cut off the fibre optic cable that links the North West Frontier Province to the national telecommunication grid for more than four hours last weekend. Two similar incidents were also reported from Balochistan.

This normalcy might last only as long as the military stands guard at PTCL sites, eyeing every movement of the workers.

“While the state has done everything within its means to crush the resistance against PTCL’s privatisation, the vast majority of workers remains adamantly opposed to privatisation and will remain hostile to the new management, thereby, hampering its operations,” said a letter circulated by the Anti-Privatisation Alliance, a grouping of trade unions, political parties and anti-globalisation and civil society groups formed in reaction to the PTCL events.

The government resorted to undemocratic and oppressive methods in its haste to sell off the company, said Riaz Ahmed, the convener of the alliance. He told IPS in an email message that the government was privatising precious assets of the country at throwaway prices, enslaving it to international monetary institutions.

While the government’s handling of the privatisation spurred to action an otherwise dormant labour rights movement, it also provided opposition political parties an opportunity to lambaste leaders on technical grounds.

“The Arab company that will now run PTCL only has the experience of running a network in a country with just 4.2 million people. How could it operate and manage a company whose subscribers are more than 15 million?” asked Afsarul Mulk, a leader of the Pakistan People’s Party.

For many PTCL employees, the sale was the saddest event of their lives. Not only are they now uncertain about their jobs and futures, a majority of the 65,000 workers regard the privatisation as a personal loss.

“We worked hard to build the company to a level that it was finally bringing in profits for the government. Now we have given it all to a foreign company,” says Mohammad Salim, who has worked as a lineman for more than 10 years.

PTCL earned 29 billion rupees in profits for the year ending June 2004. Salim, who makes 6,000 rupees a month, does not know what the future holds for him, although the government assures workers they have nothing to fear.

After their negotiations with the unions, officials announced a hefty benefits package to break workers’ opposition to the sale. It includes a 30-percent pay hike; a 20-percent raise in special allowances like telephones bills, laundry allowance and transportation; a 500 percent increase in children’s education grants; loan write-offs; and jobs for the children of dead PTCL employees.

“All deserving employees would be promoted; all contract employees would be given permanent jobs, and 10 percent of the company’s shares, at a discounted rate, will be given to the employees,” said Owais Leghari, Pakistan’s minister for information technology and one of the key proponents of privatisation.

But the package has been rejected by eight of nine workers unions, who want the government to retain management rights of PTCL.

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