Outsourcing of Islamabad Airport canceled over revenue-sharing model
The Federal Cabinet has officially canceled the tender for outsourcing
Islamabad International Airport (IIA) under the Public-Private Partnership
(PPP) framework due to disagreements over the revenue-sharing model.
The government’s original guidelines aimed to retain 56-57% of both
aeronautical and non-aeronautical revenues, with the remaining 43-44% allocated
to the private operator. However, the Turkish consortium TERG—which includes
Terminal Yapi, ERG Insaat, and ERG U—submitted a bid offering 47.25% for the
private sector, failing to meet the Minimum Revenue Guarantee (MRG) set by the
cabinet. As a result, the bid was rejected.
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of Islamabad Airport to accelerate
The Aviation Division emphasized the strategic importance of Islamabad
Airport as a vital aviation hub, arguing for greater state control over its
airside and landside operations.
Sources indicate that Deputy Prime Minister Ishaq Dar played a key role in
overseeing the evaluation process, signaling the high level of attention the
issue received. Despite expedited feedback from the Cabinet Committee on
Privatization (CCoP) and Dar’s direct involvement, the inability to reach a
consensus led to the cancellation of the tender. The matter has now been
referred to the International Finance Corporation (IFC) for review to ensure
the process aligns with international best practices in airport management.
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Airport management outsourced to Turkish consortium for 15 years
Deputy Prime Minister Dar and other officials underscored that while private
sector participation remains a priority, it must protect national interests and
ensure public benefits. Future efforts to outsource the airport may proceed
through bilateral negotiations or a revised tender process.
Source: Pakistan Observer