The Economic Coordination Committee (ECC) of Pakistan’s cabinet has given the go-ahead for a draft Transaction Advisory Agreement (TASA) with the International Finance Corporation (IFC), a World Bank Group affiliate, to hand over the operations of three of the country’s international airports to a foreign country.
This move is intended to attract private investors and airport operators through a competitive and transparent process to develop land assets and enhance commercial airport activities. As a result, the Pakistan Civil Aviation Authority (PCCA) has reached an agreement.
The draft agreement, however, appears to be in favor of the IFC, with protections provided in the shape of penalties if Pakistan decides to terminate the contract. Under the agreement, Pakistan will pay the IFC a transaction fee, including a success fee of $6 million upon completion of outsourcing the operations of the three airports.
Read: Pakistan decides to outsource three airports
In addition, the investor or the operator will be required to take an entrepreneurial risk and make a substantial investment in improving the airport infrastructure and leveraging the potential of acquiring lands to the maximum extent.
The ECC had initially deferred the agreement’s summary earlier this week and instructed the secretaries of the Aviation Division and the Ministries of Privatisation and Law to clarify whether outsourcing the said airports could be undertaken within the scope of the Public-Private Partnership Act-2017 (PPPA 2017). The ECC also asked them to explore the possibility of payment of milestone fees by the successful concessionaire at the close of the transaction instead of the PCAA.
The ECC has also approved various grants and schemes under the Sustainable Development Goals Achievement Programme (SAP) for developing Sindh, Khyber-Pakhtunkhwa, Punjab, and the erstwhile Federally Administered Tribal Areas.
Read: Pakistan defers agreement to hand over three airports to foreign country
A supplementary grant worth Rs7.3 billion has been approved to carry out politically oriented projects, while Rs607.6 million has been approved for the execution of development schemes in Sindh. Rs1.7 billion has been approved for the execution of development schemes under the SAP in K-P and Sindh. Rs5 billion has been sanctioned for the execution of development schemes in the erstwhile Federally Administered Tribal Areas.
The cabinet has also approved the Declaration of Commerciality and Field Development Plan over Hilal and Iqbal discoveries in favor of M/s Mari Petroleum Company Limited (MPCL) and granted a second two-year renewal over the Kirthar exploration block license to the Polish Oil and Gas Company Limited. Additionally, the meeting has granted permission for extended well testing over the Ghazi-1 discovery to MPC.
 to outsource the operations of three of its international airports to foreign investors. The move was made under the Public-Private Partnership Act of 2017 and will involve the engagement of private investors and airport operators.){kind=link}