In a significant development for Pakistan’s aviation industry, a Turkish consortium has emerged as the sole bidder for the operations of Islamabad International Airport. However, their concession fee offer falls below the minimum threshold set by the Pakistan Airports Authority (PAA).

The consortium, comprising Terminal Yapi, ERG Insaat, and ERG UK, proposed a 47% revenue share as a concession fee—short of the required 56%. This bold move has triggered deliberations and raised questions about Pakistan’s ambitious privatisation agenda, which aims to generate revenue by outsourcing operations of major state-owned enterprises.

Established on August 9, the PAA operates as an autonomous public sector body under the aviation ministry. Its role is pivotal in advancing Pakistan’s privatisation goals, especially in collaboration with the International Finance Corporation (IFC), a World Bank Group member advising Islamabad on outsourcing initiatives.

Privatisation Push Under Scrutiny

This bidding process is part of a broader strategy under the $7 billion International Monetary Fund (IMF) program, aimed at reforming Pakistan’s struggling economy. Alongside airport operations, the government is working to privatise the debt-laden Pakistan International Airlines (PIA) by offloading a 60% stake. Unfortunately, efforts to privatise PIA earlier in October fell flat, with offers well below expectations.

What’s Next?

The bid evaluation committee, led by Sadiq ur Rehman, deputy director general of the PAA, has referred the matter to the IFC for further review. The decision on whether to accept or reject the bid will depend on the final evaluation report.

As Pakistan grapples with economic challenges, the outcomes of these privatisation efforts will play a critical role in shaping the country’s financial stability.