Islamabad, January 2, 2025 – A Turkish consortium, the sole bidder for the operation of Islamabad’s international airport, has offered a concession fee below the required minimum threshold, according to the chairman of the bid evaluation committee.
The consortium, comprising Terminal Yapi, ERG Insaat, and ERG UK, proposed to pay the Pakistan government 47 percent of its revenue from operations as a concession fee. However, the Pakistan Airports Authority (PAA) has set the minimum requirement at 56 percent.
The PAA, an autonomous body established on August 9 under the aviation ministry, will refer the matter to the International Finance Corporation (IFC), a member of the World Bank Group, for further evaluation. The IFC is advising the Pakistani government on the outsourcing process, and its input will be crucial in deciding whether the bid proceeds.
Sadiq ur Rehman, chairman of the bid evaluation committee and deputy director general of the PAA, stated, “The details of the financial proposal will be presented and forwarded to the IFC for further evaluation and submission of final reports.”
The bid to privatize Islamabad’s airport is part of Pakistan’s broader push to speed up privatization efforts, with the government aiming to generate revenue by outsourcing the operations of three major airports. This move is in line with ongoing reforms to reduce the country’s fiscal deficit, as Pakistan also seeks to offload a 60 percent stake in its debt-ridden national carrier, PIA.
This follows a failed attempt to privatize PIA in October, which also saw a single bid well below the asking price. The government’s privatization agenda is supported by a $7 billion program from the International Monetary Fund (IMF) aimed at reforming state-owned enterprises and stabilizing Pakistan’s economy.
The future of the Islamabad airport privatization bid now hinges on the recommendations of the IFC.
