The federal government has declared the outsourcing of Islamabad International Airport a priority in an open bidding process, following the sale of Pakistan International Airlines (PIA).
Officials told a parliamentary committee that Islamabad Airport will be outsourced through an open and competitive bidding process, rather than government-to-government arrangements. A financial adviser is being appointed to structure the transaction and manage the bidding process.
Secretary Privatization Commission said several countries and companies, including Saudi Arabia, the UAE and Turkey, have already shown interest in the outsourcing of Islamabad Airport. However, the government has decided that open bidding will be used, with airport management awarded to the bidder offering the highest value.
Briefing the committee, officials said the government plans to outsource not only Islamabad Airport but also Karachi and Lahore airports in phases. After outsourcing, existing staff from major airports will be redeployed to smaller airports across the country.
The secretary said that following PIA privatization, interest in airport outsourcing has increased significantly. He noted that operational issues at major airports have affected passenger experience, citing delays of up to one hour just to enter Islamabad International Airport.
Committee Chairman Senator Afnan Ullah Khan said that either Islamabad Airport should be privatized or facilities should be urgently improved, adding that Karachi Airport also faces serious infrastructure and hygiene issues.
According to the briefing, outsourcing large airports will allow the Civil Aviation Authority to focus resources on improving operations at smaller airports. The Asian Development Bank has also shown interest in supporting Pakistan’s airport outsourcing program.
The government earlier explored government-to-government outsourcing options, but no formal agreements were finalized. As a result, all three major airports were included in the Privatization Programme to be pursued through competitive processes.
Separately, the committee was briefed on progress in PIA privatization. Officials said the government currently holds 25 percent shares in PIA, valued at Rs. 45 billion.
The secretary said the Arif Habib consortium, which has hired a US-based aviation consultancy firm, plans to invest Rs. 125 billion in PIA. The consortium is expected to deposit Rs. 10 billion with the government within three months.
Officials said PIA’s financial close is expected within three months, while a detailed business plan will be presented within one month. Upon financial close, PIA’s valuation is expected to rise to Rs. 180 billion from the current valuation of Rs. 9 billion.
The briefing noted that shutting down PIA would have cost the government nearly Rs. 300 billion, including liabilities and Rs. 34 billion in pension payments to retirees. Officials said PIA’s fleet is planned to increase to 40 aircraft over the next four years.