ISLAMABAD – Cash-strapped Pakistan has formally initiated the process to outsource operations of its three major airports.
The Finance Ministry announced on Thursday that the airports would be run on public-private partnership, to avert the economic crisis that has impacted the country’s middle class.
The development comes months after railways minister, Khawaja Saad Rafique, revealed that Islamabad was negotiating with Doha and would also engage the UAE to outsource operations of its Karachi, Lahore and Islamabad airports.
He had said in January that the move would improve airport service standards and would also bring in much-needed foreign direct investment into the country which is facing balance of payment crisis and skyrocketing inflation.
At that time, the minister had detailed that the country had acquired the services of the International Finance Corporation – a subsidiary of the World Bank – that has provided consultancy for dozens of airports.
The fresh move comes as a summary to engage the IFC as a transaction advisor for the outsourcing process was presented before the Economic Coordination Committee (ECC) – country’s top economic body.
“The ECC after detailed discussion approved the draft Transaction Advisory Agreement (TASA), reached with the IFC by PCCA for outsourcing of three airports,” the finance ministry stated.
Participants of the high profile meeting were informed that the outsourcing of three airports has been kicked off within the scope of a public-private partnership to engage private investors/airport operators through a competitive and transparent process.
The investors and airport operators would be required to “run the airports, develop appertaining land assets and enhance avenues for commercial activities and to garner full revenue potential,” the statement added.
The announcement comes as Pakistan faces unprecedented economic crisis amid negotiations with the International Monetary Fund (IMF) which have been unsuccessful to this day.
Pakistan is currently seeking external financing to avoid defaulting on its obligations, as the foreign exchange reserves have dipped in recent months and the currency has been devalued to a large extent putting the burden on the working class.
The airports in Lahore, Islamabad and Karachi are the most important of all the airports in the country and outsourcing its operations gives a clue of the severity of the economic crisis.
