Islamabad Airport Outsourced Under UAE Deal
Pakistan is moving forward with plans to transfer the operation and management of the Islamabad International Airport (IIAP) to a firm based in the United Arab Emirates (UAE), pursuing the deal under a government-to-government (G2G) framework.
This decision comes after Pakistan rejected a lower offer from a UK-Turkish consortium to run the capital’s key aviation hub.
During a parliamentary briefing on Thursday, Wasim Tariq, Joint Secretary for Aviation at Pakistan’s Defence Ministry, confirmed that negotiations are underway with Abu Dhabi Investment. The Gulf state has proposed a significantly sweeter deal, offering Pakistan as much as a 60% share in the total revenue generated by the Islamabad International Airport. In contrast, the rejected bid from the consortium of ERG UK and Terminal Yapi of Turkey had offered only 40% of the total revenue.
Part of Broader IMF Economic Reforms
The outsourcing of the airport’s operations is part of a series of economic reforms sought by the International Monetary Fund (IMF). Pakistan is looking to gradually hand over the management of its three major airports—in Islamabad, Lahore, and Karachi—to private operators.
The government is currently in the process of appointing financial advisers to oversee the handover of operations for the remaining two major airports in Lahore and Karachi.
The IMF, a key financial lifeline for Pakistan, has pushed the government to restructure its economy, including plugging financial leakages and reducing the state’s direct involvement in various businesses. Following these ongoing reforms, Pakistan is expected to receive a $1.2 billion loan tranche by December, subject to approval by the IMF board.
In related privatization news, Usman Bajwa, Secretary at the Privatisation Commission, informed lawmakers on Thursday that Pakistan also aims to conclude the sale of the national carrier, Pakistan International Airlines (PIA), by December.