The federal government’s Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) on Thursday reportedly approved a proposal to transfer the management of Islamabad International Airport to the United Arab Emirates (UAE) under a government-to-government (G2G) arrangement.

 

Reports reveal that Deputy Prime Minister and Foreign Minister Ishaq Dar chaired the CCoIGCT meeting, wherein the decision to transfer management to the UAE was reached. Petroleum Minister Ali Pervaiz Malik, Special Assistant to the Prime Minister Tariq Bajwa, and key officials from relevant government departments also attended the meeting.

 

During the meeting, the committee approved the process for a negotiation team to work towards finalising the deal with the UAE. Reports suggest that the Prime Minister’s adviser on privatisation will lead the aforementioned negotiation team and will iron out the details of the deal in consultation with the privatisation, finance, defence, and law ministries. 

 

As per the details, the decision to relinquish managerial control over the airport is part of the federal government’s attempt to minimise losses incurred by the state’s entities, boost these institutions’ efficiency, and attract foreign stakeholders to invest in and modernise state assets. Reports suggest that similar arrangements are also under consideration by the federal government, which could witness the outsourcing of other major airports in Pakistan.

 

According to reports, Islamabad International Airport had been riddled with operational inefficiencies since its inauguration in April 2018. Moreover, the airport had also been beset by financial constraints since its inception, rationalising the authorities’ decision to hand over managerial control to the UAE.

 

Lawmakers and authorities alike believe that the G2G deal with the UAE, regarding Islamabad International Airport, could restore foreign investors’ confidence within Pakistan’s aviation sector, potentially drawing in investments.  This is because authorities expect the new managerial team to bring global expertise to the table and ensure that passengers receive better services.  

 

It merits a mention that the federal government did not attempt to outsource the operations of Islamabad International Airport under an open bidding process as was initially planned. The government chose to pursue a G2G model instead, possibly in anticipation of bids falling far below an acceptable amount. 

 

The federal government has been dismayed similarly before, when Pakistan International Airlines’ (PIA) televised auction attempt drew in only one, abysmally low, bid of Rs10 billion against the minimum set price of Rs85 billion from a real estate developer.