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Pakistan forced to outsource Islamabad airport due to forex crisis: report

The Government of Pakistan is insisting on outsourcing the operation of major airports.


Amidst the ever-decreasing foreign exchange reserves, the Government of Pakistan is insisting on outsourcing the operation of major airports. According to the Dawn report, the finance minister has already called several meetings of the committee set up to include foreign operators for outsourcing. Dawn quoted sources as saying that Finance Minister Ishaq Dar asked the stakeholders to finalize the formalities for outsourcing the operations of the Islamabad International Airport (IIA) by August 12, the last day of the current government’s term.

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The minister chaired the steering committee meeting on Saturday to assess the progress of airport operations outsourcing. According to the Dawn report, a source associated with the meeting told Dawn that the committee had given clear instructions to complete the processes required for IIA outsourcing on priority.

An official announcement issued after the meeting said that the World Bank’s International Finance Corporation (IFC), the transaction advisor for outsourcing, briefed the meeting about the progress. Dar wants the changes in aviation laws to be approved before the end of the month. The meeting also agreed to fast-track outsourcing of IIA to improve service delivery in line with best industry practices, reported Dawn. IFC also made a presentation to the committee, which also decided on the future roadmap for outsourcing IIA operations.

On 31 March, the Economic Coordination Committee decided to end the 25-year outsourcing of operations and land assets at Islamabad, Lahore and Karachi airports. Their work will be carried out through public-private partnership to generate foreign exchange.

In the meeting on Saturday, Dar also gave a deadline to the departments concerned to amend civil aviation laws and finalize the restructuring plan of Pakistan International Airlines (PIA), reports Dawn. The amendments are being made to separate the functions of Pakistan Civil Aviation Authority, PIA and Airport Security Force. Its purpose is to end the overlapping responsibilities of these organizations by making an ordinance.

The minister insisted on getting the amendments approved by Parliament before the end of July. The deadline is significant as it will allow global aviation regulators to send inspectors in August for on-ground assessment of operational systems and standards required to restore PIA flights to the US, UK and Europe. According to the Dawn report, failure to meet this deadline will result in a delay of one year in getting the inspection done.

PIA flights to these destinations have been suspended since 2020 following a controversy over pilots’ professional degrees and other aircraft safety standards. The meeting, chaired by the Finance Minister, was also attended by Federal Aviation and Railways Minister Saad Rafiq, Special Assistant to the Prime Minister on Finance Tariq Bajwa, Aviation Division Secretary, CEO of Public Private Partnership Authority, PCAA Director General, IFC representative and other government officials.

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