New Islamabad airport to be leased out to international investors

Following the practical problems in outsourcing two international airports in Karachi and Lahore, the government has chosen to lease out New Islamabad International Airport to interested international investors in the first phase.

In comparison to other airports, the New Islamabad International Airport has been designated a “clean” transaction thus far. As a result, the government is considering starting its outsourcing as soon as possible.

Furthermore, in its presentation to Minister of Finance Ishaq Dar in the federal capital, the International Finance Corporation (IFC) stated that there are parties interested in securing the operations of these three airports.

However, the government will find it difficult to move quickly because it has not yet advertised the outsourcing of any airport.

“There are a few practical issues that must be addressed before handing over the airport to any international party.” For example, the national flag carrier Pakistan International Airlines (PIA) has become a defaulter of several airport services,” top official sources acknowledged to The News.

“Even if the government assumed PIA’s past liabilities, how would the new airport operator allow the carrier to use free-of-charge facilities?” This was one of the primary issues that needed to be addressed before proceeding.”

“In Karachi and Lahore, certain parts of the airports are occupied by some relevant agencies, so a permanent solution is required because potential investors would like to use the entire airport for commercial purposes,” officials stated.

The Airport Security Force (ASF) has also become a roadblock in completing this transaction.

It remains to be seen how the government will address these issues. According to the sources, the government is making every attempt to outsource New Islamabad International Airport before its tenure expires in the second week of August 2023, but this appears tough.

Dar also presided over the high-level meeting and asked the transaction adviser to develop a realistic strategy to outsource the Islamabad airport to any interested party with airport management experience.

“The government has set a deadline for the completion of this transaction next month, and the World Bank’s IFC has been tasked with developing a feasible plan,” the sources added.

The transaction adviser and Civil Aviation Authority (CAA) has been directed to speed up the complete spadework so that New Islamabad International Airport can be outsourced within the stipulated timeframe.

According to an official statement issued by the Ministry of Finance, Dar chaired a steering committee meeting to oversee the outsourcing of the airports’ operations at the finance division. 

During the meeting, IFC and the transaction adviser gave a presentation to the committee, which decided on the future roadmap for outsourcing the first airport to improve service delivery and match best international practices.

Aviation and Railways Minister Khawaja Saad Rafique, Commerce Minister Syed Naveed Qamar, SAPM on Finance Tariq Bajwa, SAPM on Government Effectiveness Dr Muhammad Jehanzeb Khan, Aviation secretary, CAA DG, IFC representatives and senior officers from finance and aviation attended the meeting.

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