Low outsourcing bid for Islamabad Airport creates hurdles in reform efforts
A bid to infuse private sector
expertise into the operations of Islamabad International Airport has stumbled,
exposing the hurdles confronting Pakistan’s ambitious economic reform efforts.
During a live televised
announcement, officials disclosed that the only proposal for managing the
airport – submitted by a Turkish-British consortium – fell significantly short
of the government’s expectations. The consortium proposed a 47.25% revenue-sharing
agreement, well below the 56% minimum demanded by aviation authorities.
“The disparity between expectations
and reality couldn’t have been clearer,” remarked a senior aviation official,
speaking anonymously due to the sensitivity of the negotiations.
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consortium submits below-minimum bid for Islamabad Airport
Complicating matters further, it was
revealed that the World Bank’s International Finance Corporation (IFC), serving
as a transaction advisor, had recommended a lower revenue-sharing benchmark of
46.5%. This contradiction led to an emergency meeting at the Prime Minister’s
office, where cabinet members reportedly questioned the aviation authority’s
decision to push for higher terms despite expert advice.
For Islamabad International Airport
– a facility serving six million passengers annually, with three-quarters of
them on international routes – the stakes are considerable. The airport has
struggled to match the standards of regional competitors, reflecting broader
challenges within Pakistan’s aviation sector.
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of Islamabad Airport to accelerate
The Pakistan Airports Authority has
now turned to the IFC for updated recommendations, expected by January 9.
However, the episode has sparked debate over whether Pakistan’s bureaucracy is
equipped to align with market realities in its privatization drive.
“There’s often a disconnect between
what governments aim for and what investors are willing to commit to,” said a
seasoned infrastructure consultant familiar with South Asian projects. “This
gap is even more pronounced in markets with evolving regulatory environments.”
As Islamabad considers its next
steps, the decision could signal whether Pakistan’s economic reforms prioritize
pragmatic outcomes over rigid expectations. For now, the airport’s future –
much like planes navigating heavy fog – remains uncertain.
Source: The Nation