Today, the Cabinet's Economic Coordination Committee (ECC) approved outsourcing the management of many important airports, including those in Lahore, Karachi, and Islamabad.
Senator Mohammad Ishaq Dar, the federal minister of finance and revenue, presided over the ECC of the Cabinet meeting.
Since a few years ago, the government has reportedly been studying a number of possibilities to outsource the management of Pakistan's main airports in order to enhance passenger services and maximise income potential.
The federal cabinet communicated several choices in this respect and showed interest in hiring an audit company to draft ideas for the corporatization of airports.
A committee of ministers was also established by the government to oversee the whole procedure. The procedure hasn't been completed, though.
The operation of three airports in Karachi, Lahore, and Islamabad will be outsourced, the prime minister ordered during a meeting on December 30, 2022. By enlisting a top International Financial Institution (IFI) in accordance with the Public-Private Partnership Authority Act of 2017, the procedure would be swiftly completed.
The Pakistan Civil Aviation Authority (PCAA) and IFI entered a direct engagement as transaction consultants. Only the World Bank Group's International Finance Corporation (IFC), nevertheless, showed interest. In response, the PCAA's board gave PCAA permission to discuss the conditions of its participation with the IFC.
A draught Transaction Advisory Agreement (TASA) was negotiated with the IFC after extensive talks and careful consideration of the opinions of the Federal Board of Revenue (FBR), Ministry of Foreign Affairs, and Ministry of Finance, and it was submitted to the PCAA board on March 2, 2023.
The provided draught TASA was approved by the board after being reviewed by the Ministry of Law and Justice. In addition, the PCAA Board noted that a strong political commitment is required for the outsourcing of the management of the three target airports because the TASA is based on a success fee model with consequences for the client's failure to move forward with the transaction.