EWI at loggerheads with government over Telikom privatisation

The government of Papua New Guinea and Econet Wireless International (EWI) are embroiled in an argument over the privatisation of the former’s sole telecoms service provider Telikom. According to local press reports, the state has called a stop to the sale and purchase agreement it struck with EWI in early 2004. Papua New Guinea sanctioned the Zimbabwe-based company to install a GSM network in the country at a cost of USD50 million, and inked a share agreement entitling EWI to a 51% stake in Telikom, once it was privatised, leaving the state holding the remainder. However, the Minister for State Enterprises and Information last week passed a motion to abandon the sale amid concerns that the purchase agreement is flawed and perhaps unlawful. EWI has countered that the contract is valid and has sent a letter to the government of Papua New Guinea seeking clarification, but also threatening possible legal action. The twist is the latest in a long line of problems that have mired the privatisation in controversy. In late 2004 the Prime Minister, Michale Somare, sacked his State Enterprises and Information Minister Puka Temu, whom he accused of dismissing the Telikom board and instigating a campaign to offload a majority shareholding to EWI.