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Minister Confirms 15-Year Outsourcing Of Islamabad Airport

Minister Confirms 15-Year Outsourcing Of Islamabad Airport

The Islamabad International Airport is set to undergo a 15-year outsourcing initiative aimed at enhancing services for travelers, as confirmed by Adviser to the Prime Minister on Aviation, Air Marshal (retd) Farhat Hussain Khan. In a session of the Upper Chamber of the Parliament, Khan disclosed that similar plans for outsourcing were under consideration for the airports in Karachi and Lahore, pending the outcome of a study conducted by the International Finance Corporation (IFC).

A Transaction Advisory Services Agreement (TASA) has been formalized between the Pakistan Civil Aviation Authority and the International Finance Corporation to facilitate the outsourcing of operations at three international airports: Islamabad, Karachi, and Lahore. The IFC, a subsidiary of the World Bank Group, will serve as the transactional advisor for the outsourcing process, with Islamabad International Airport being the inaugural airport slated for outsourcing.

Read more : Ishaq Dar chairs meeting to monitor outsourcing of Airports

Air Marshal Farhat Hussain Khan affirmed that the identity of the successful bidder for Islamabad International Airport would be revealed upon completion of the bidding process. Regarding the timeline, he indicated that the award of concession for outsourcing is anticipated to be finalized before June 2024.

Clarifying the scope of outsourcing, Khan specified that only specific components related to the operation and management of the airport would be outsourced. Crucial services such as the Air Traffic Control Tower, Rescue and Fire Fighting Services, and Air Navigation services would remain under the administrative control of the Pakistan Civil Aviation Authority.

The successful bidder is expected to make an initial payment and commit to a percentage of revenue earned from the airport. The reported initial payment requirement is a one-time amount of $100 million. The adviser noted that decisions regarding the initial amount for outsourcing at other airports would be contingent on the findings of the IFC study.

Addressing the issue of the national carrier, Pakistan International Airlines (PIA), Khan affirmed that the privatization process was conducted transparently. He specified that PIA would be privatized as a flight entity, and decisions regarding its other properties would be determined by the Privatization Commission.

Senators were apprised that although PIA had achieved operational profit in January-June 2023, the net loss incurred as of June 30, 2023, amounted to Rs61.6 billion due to high financing costs and exchange losses. PIA’s accumulated liabilities were reported to be Rs809 billion as of the same date.