PALESTINIAN Prime Minister Salam Fayyad was able to pay public service salaries this month thanks to an unexpected source – Qatar Telecom-controlled Wataniya Palestine Mobile Telecommunications Company.
The firm is an arm of Kuwait’s National Mobile Telecommunications Co, which is in turn owned by Qtel.
According to Reuters news agency, Fayyad realised he was facing a major problem when foreign donors failed to give enough funds to pay public service salaries.
So, in an unconventional move, the former World Bank economist secured a last-minute lifeline from Wataniya Palestine Mobile Telecommunications Co, which was keen to speed its entry into the Palestinian market. Furthermore, the initiative had the help of Middle East envoy Tony Blair.
Western and Palestinian officials said the unusual financial arrangement came together last week when Israel, after months of prodding from the former British prime minister and others, agreed to assign radio frequencies enabling Wataniya Palestine Mobile Telecommunications Co to begin operations.
The company, in turn, agreed to quickly pump an initial $78mn into the Palestinian Authority’s cash-strapped coffers and even provided written assurances to banks so Fayyad could obtain short-term financing to meet payroll on Thursday.
Overall, Wataniya is expected over time to pay the Authority more than $354mn in licence fees, officials said.
The first payment to the government underscored how far the Palestinian Authority’s budget is in crisis despite billions of dollars in aid pledged to support a US-backed peace drive.
The deal also shed light on Israel’s grip on the Palestinian Authority’s purse as well as on relations between Fayyad’s government and a telecoms company that is seeking to establish only the second cellular network in the Palestinian territories after that of Jawwal, a unit of local firm PalTel.
Fayyad paid salaries to workers after announcing that he had received $42mn from the United Arab Emirates. He made no mention of cash from Wataniya Palestine, but a senior Western official said: “Without this money, they would not have been able to pay salaries.”
He added that it was a sign of “desperate” times.
Fayyad had been scrambling for weeks to find the money to cover salaries.
Donor countries pledged $7.7bn to the Palestinians at Paris in December. But only a fraction of that has materialised and most of it is earmarked for projects, not general spending.
Wataniya Palestine’s chief executive, Allan Richardson, declined to comment on any financial arrangement with Fayyad’s government. He said: “It’s between us and the Palestinian Authority and, from my perspective, it’s a confidential matter.”
Blair was involved in negotiations with Israel on Wataniya’s case, arguing it would boost the Palestinian economy, but Western diplomats said he faced resistance from the Israeli army, which uses some of the same frequencies in the occupied West Bank.
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