Open bidding for Islamabad Airport

The federal government has said that following the privatisation of Pakistan International Airlines (PIA), the privatisation of Islamabad International Airport has been declared a priority, adding that the process will be carried out through open bidding rather than government-to-government (G2G) arrangements.

According to details, during a meeting of the Senate Standing Committee chaired by Senator Afnanullah Khan on Friday, the Secretary of the Ministry of Privatisation told the committee during a briefing that the privatisation of Islamabad Airport is the next priority after PIA. He said that Saudi Arabia, the United Arab Emirates and Türkiye have expressed interest in Islamabad Airport, and that instead of G2G privatisation, open bidding will be conducted. He said that whichever country or company offers the highest price will be awarded the airport's management.

He added that after Islamabad, Karachi and Lahore airports will also be outsourced. A financial adviser is being appointed to outsource Islamabad Airport. The privatisation secretary said that the Asian Development Bank (ADB) is interested in assisting Pakistan with airport outsourcing. After outsourcing the three major airports, the existing staff will be deployed at smaller airports.

Briefing the committee, Privatisation Commission Secretary Usman Bajwa said that 24 state-owned entities are being privatised this year, and that the three major airports have also been included in the privatisation list. He said that the privatisation process of five DISCOs and two GENCOs has been initiated. He added that the prime minister has directed that the capacity of the Privatisation Commission be enhanced and that the best consultants from the market be hired. At present, the Privatisation Commission has six consultants, and the prime minister has instructed that the privatisation programme be expedited.

During a briefing on PIA's privatisation, the committee was told that the process could not be completed successfully in 2024. Committee member Senator Palwasha Khan questioned whether a petition against the Arif Habib Group pending in the Supreme Court had been decided. In response, the privatisation secretary said that the commission had conducted due diligence through relevant institutions and that no action or blacklisting against the company had come to light, nor had any court verdict been received in this regard.

Senator Palwasha Khan then asked whether the Competition Commission's Aisha Steel-related decision against the Arif Habib Group had also not been received. In reply, Bajwa said that no such decision had been received by the commission from any institution.

Committee member Senator Bilal Ahmed questioned how bidders without aviation experience were allowed to participate in the bidding process. Committee Chairman Senator Afnanullah Khan responded that no such condition had been set for privatisation. Ahmed remarked that if goods are to be sold from a roadside cart, that may be acceptable, but in previous privatisations many bidders were disqualified for not meeting technical criteria. In response, the chairman said that this was not a tender but a privatisation process, and that privatisation could not be compared with a tendering mechanism. He added that the privatisation procedure had been approved by the government and international institutions, and that consortium participation had been allowed from the outset.

It was stated that either Islamabad Airport should be privatised or its facilities improved. The privatisation secretary said that interest in airport privatisation has increased after PIA's privatisation, adding that it takes up to an hour to enter Islamabad International Airport, which is why it should be privatised. Senator Palwasha Khan questioned whether the government could no longer do any work itself and would hand everything over to outsiders.

In response, the committee chairman said that rats roam around Karachi Airport, to which Senator Palwasha Khan replied that rats, not elephants, also roam around Parliament. The chairman reiterated that the government would privatise these airports.

The privatisation secretary said that companies from Saudi Arabia, Türkiye and the UAE are interested in operating the airports, and that the ADB is also keen to assist Pakistan in outsourcing airports. He added that outsourcing major airports would enable the Civil Aviation Authority (CAA) to better manage and improve smaller airports.

Ahmed suggested that the government should outsource all airports at once, adding that the CAA could provide a better opinion on the matter.