Civil Aviation Authority’s dual role of regulator and provider of airport services proposed. PHOTO: FILE
Last month, CAA directly issued a request for proposals (RFP) from prospective investors for outsourcing the operation, management and development of the New Islamabad International Airport, Lahore’s Allama Iqbal International Airport and Karachi’s Jinnah International Airport.
The last date for submission of technical and financial bids for taking control of the three airports is March 25. The bidder that will apply for acquiring the New Islamabad International Airport would be responsible for its operationalisation by August this year.
CAA is part of the government’s privatisation programme but not among the entities that have been picked for early privatisation. Even if CAA successfully completes the transaction, it cannot withstand the legal scrutiny, said finance ministry sources.
According to section 25 of the Privatisation Ordinance of 2000, privatisation of any manner, including lease and concession agreements, fall under the direct domain of PC. Moreover, section 5 of the ordinance states “PC will take operational decisions on matters pertaining to privatisation, restructuring, deregulation, regulatory issues including approval of licencing and tariff rules and other related issues pertaining to the privatisation programme approved by the cabinet.” PC will also issue directions and instructions to the management of a business undertaking on all major important administrative, financial, reporting and policy matters, according to the Ordinance.
CAA is among entities the Council of Common Interests and the federal cabinet have approved for privatisation. Even so, CAA has been running a programme to hand over the country’s three international airports to private parties. It had made similar attempts in the past but shelved the plan after objections raised by the PC.
This is not for the first time the Aviation Division has tried to undermine PC’s role. Former adviser to prime minister on aviation Shujaat Azeem had also created hurdles in privatisation of PIA. At that time, the prime minister had to intervene to resolve the differences.
Aviation Division spokesman Sher Ali promised to give a response but later on did not pick the phone calls despite repeated attempts. PC Secretary Sardar Ahmad Nawaz Sukhera also declined to comment. Special Assistant to the Finance Minister Tariq Pasha also did not respond to a question on measures the finance and privatisation minister may take to stop CAA from carrying out the illegal move.
According to the ad given in the press, interested companies would be responsible to undertake the “operation, management, maintenance and development” of aeronautical and non-aeronautical assets, and land parcels in order to ensure effective management and development of facilities in and around such airports that are vital to safety and efficiency of airport operations and passenger satisfaction.
Since CAA does not have the expertise and legal mandate to undertake privatisation transactions, its plans have raised transparency concerns.
Published in The Express Tribune, March 13th, 2017.
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