ISLAMABAD – Due to disagreements regarding the revenue-sharing model, the federal cabinet has officially cancelled the tender for outsourcing Islamabad International Airport (IIA) under the Public-Private Partnership (PPP) framework.
According to the cabinet-approved tender guidelines, the government intended to retain 56-57% of aeronautical and non-aeronautical revenues and allocate 43-44% to private operators.
However, the Turkish consortium TERG—including Terminal Yapi, ERG Insaat, and ERG U—submitted a bid proposing 47.25% to the private sector. The bid did not meet the Minimum Revenue Guarantee (MRG) established by the Cabinet, resulting in its rejection.
The Aviation Division stressed the strategic importance of Islamabad Airport as a key aviation hub, warranting greater state control over its airside and landside operations. The Deputy Prime Minister, Ishaq Dar, played a significant role in overseeing the evaluation process, reflecting the high-level attention the matter received. Despite Deputy Prime Minister Ishaq Dar’s involvement and expedited feedback from the Cabinet Committee on Privatization (CCoP), the inability to reach a consensus resulted in the tender’s cancellation.
The matter has been referred to the International Finance Corporation (IFC) for review, ensuring alignment with international best practices in airport management. Officials, including Deputy Prime Minister Ishaq Dar, emphasized that while private sector participation remains a priority, it must safeguard national interests and maximize public benefit. Future outsourcing may proceed through bilateral negotiations or revised tender processes.
This cancellation underscores the government’s focus on protecting national assets, with Deputy Prime Minister Ishaq Dar reaffirming the commitment to transparent and fair procurement in critical infrastructure projects.
