The Pakistan Airports Authority (PAA) has refuted claims that a financial bid for outsourcing the operations of Islamabad International Airport has been approved. The PAA issued a statement clarifying that reports regarding the approval of the bid from the T.E.R.G. consortium were “baseless” and “misleading.”
Clarification from the PAA
In its statement, the PAA’s spokesperson emphasized that the outsourcing process is still undergoing legal procedures and has not been finalized. The authority urged the media and other stakeholders to avoid spreading unverified reports. The spokesperson further stressed that premature or inaccurate reporting could cause harm to national matters, and the final decision will be officially communicated once appropriate.
The clarification follows widespread media coverage suggesting that the financial bid had been approved. The PAA reassured the public that no such decision had been made yet, and the process is still ongoing.
Turkish Consortium Offers Below Minimum Concession Fee
The confusion surrounding the outsourcing bid comes after a Turkish consortium, the sole bidder for Islamabad airport’s operations, submitted a financial proposal with a concession fee below the minimum threshold. The consortium, consisting of Terminal Yapi, ERG Insaat, and ERG UK, offered the government 47 percent of its revenue from operations. However, the minimum required concession fee is set at 56 percent, making the bid non-compliant with the stated criteria.
Sadiq ur Rehman, chairman of the bid evaluation committee and deputy director-general of PAA, confirmed that the consortium’s offer fell short of expectations. He further added that the proposal would now be referred to the International Finance Corporation (IFC), a member of the World Bank Group, for further evaluation. The IFC has been advising the government on the outsourcing process.
Pakistan’s Push for Airport Privatisation
This move is part of Pakistan’s broader push to privatize key assets, including major airports, as part of an effort to raise revenue and reduce fiscal pressure. The country is seeking to accelerate privatization as part of a $7 billion program with the International Monetary Fund (IMF), which includes reforms to state-owned enterprises.
In addition to the airport outsourcing initiative, Pakistan also plans to sell a 60 percent stake in the Pakistan International Airlines (PIA), which has been struggling financially. The government hopes that these privatization efforts will help stabilize the economy and generate much-needed funds.
Despite challenges, such as a failed attempt to privatize PIA in October with a single bid well below the asking price, the government remains committed to pushing forward with these reforms to enhance the country’s economic standing. The outcome of the Islamabad airport outsourcing bid will play a significant role in shaping the future of Pakistan’s aviation and privatization strategies.
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