The New Islamabad International Airport is set to be outsourced to interested global investors in the first phase of a new government plan.
The decision resulted from practical difficulties in outsourcing Karachi and Lahore international airports.
Compared to other airports, the New Islamabad International Airport is deemed a “clean” transaction, prompting the government to accelerate its outsourcing.
The International Finance Corporation (IFC) revealed in its presentation to Finance Minister Ishaq Dar that potential parties were keen to run these three airports’ operations. However, the government has not yet advertised the outsourcing of any airport, making a quick procedure challenging.
Potential Obstacles in the Outsourcing Process
“There are practical issues that need resolution before an airport can be handed over to an international party,” confirmed top official sources. The national flag carrier, Pakistan International Airlines (PIA), has defaulted on various airport facilities, creating one of the primary concerns. Even if the government were to cover PIA’s past liabilities, it remains uncertain how the new airport operator would grant free-of-cost facilities to the carrier.
Additionally, some areas of the Karachi and Lahore airports are occupied by relevant agencies, presenting another hurdle. These locations require a permanent solution as potential investors would likely want to use the entire airport for commercial purposes. The Airport Security Force (ASF) is a stumbling block in executing this transaction.
While the government faces numerous challenges, it strives to outsource the New Islamabad International Airport before its tenure ends in August 2023. The government has set a deadline for this transaction’s completion next month, mandating the World Bank’s IFC to devise a feasible plan.
Dar chaired a high-level meeting, instructing the transaction adviser to devise a practical plan for outsourcing the Islamabad airport to any party with the relevant experience. The transaction adviser and Civil Aviation Authority (CAA) has been directed to expedite all preparatory work, aiming to outsource the New Islamabad International Airport within the given timeframe.
The Ministry of Finance’s official statement outlined that Dar headed a steering committee meeting to oversee the airports’ operations outsourcing. During the meeting, the IFC and transaction adviser presented the committee with a plan to improve service delivery and align with best international practices. Attendees included Aviation and Railways Minister Khawaja Saad Rafique, Commerce Minister Syed Naveed Qamar, and representatives from finance and aviation, among others.
