Cabinet defers decision on bidding procedure

Forms body to review revised procedure for airport outsourcing

ISLAMABAD:

The cabinet has raised questions over the proposed revised bidding procedure for the award of contract for the outsourcing of Islamabad International Airport under the public-private partnership mode and has constituted a committee to examine the matter.

The committee has been tasked with reviewing all aspects of the proposal presented by the Aviation Division for the revised bidding structure for the award of concession for running the Islamabad International Airport, specifically with regard to legal position under the Public Private Partnership Authority (P3A) and the Public Procurement Regulatory Authority (PPRA) rules. Following the assessment, it will submit a report to the cabinet.

During discussions in a recent meeting, the cabinet observed that the matter required further deliberation and set up a committee in terms of Rule 17(3) of the Rules of Business, 1973. Its meetings will be convened by the deputy prime minister.

The Aviation Division recalled that in a steering committee meeting, held on June 13, 2024, a second round of bidding was proposed to obtain full value of the concession, minimise the need for having to go through the whole cycle of re-bidding in case of lower-than-expected bids and ensure that the current process reached final stages.

It was added that the procedure had been widely adopted under the concept of "Best and Final Offer" (BAFO).

The division acknowledged that the proposed second round of financial bidding was not expressly provided under the PPRA rules but was supported by BAFO, as it would ensure fairness, transparency and compliance with the competitive principles of procurement.

The cabinet was informed that the steering committee had approved amendments to clauses 9.1.2 and 9.1.3 of the Request for Proposals (RFP), subject to the cabinet's ratification.

The Aviation Division stated that on June 26, 2024, the PPRA board referred the matter to P3A on jurisdictional grounds. It was discussed by the P3A board on July 5, 2024, which, while endorsing the proposal, advised the Aviation Division to seek approval of the cabinet through the Special Investment Facilitation Council (SIFC).

On July 10, 2024, the SIFC gave the green light for the second round of bidding and recommended the cabinet to approve it.

It was recalled that following a meeting chaired by the prime minister in December 2022 it was decided to outsource operations and management of Pakistan's airports under the Public Private Partnership Authority Act, 2017.

In the first phase, Islamabad, Karachi and Lahore airports were identified for outsourcing, for which the International Finance Corporation was appointed the transaction adviser.