On Thursday, the Economic Coordination Committee (ECC) decided to outsource the management of major airports. Karachi, Islamabad, and Lahore all have airports.
On Thursday, ECC will work on a nine-point agenda, including outsourcing the management of major airports in Karachi, Islamabad, and Lahore, according to sources.
Furthermore, according to sources, the Federal Government of Pakistan has considered a variety of options for outsourcing the management of Pakistan’s major airports.
The decision is intended to improve passenger services and maximise their recent income potential.
Following this decision, the Federal Cabinet presented numerous choices. Expressions of interest were also solicited in order to fulfil it by hiring an audit firm to draught suggestions for the airport corporation.
The federal government also established a ministerial committee. Keep an eye on the situation. But, the procedure was unable to be completed.
During a meeting on December 30, 2022, the Prime Minister ordered the outsourcing of three airports, including Karachi, Islamabad, and Karachi.
Furthermore, the operation will be completed promptly thanks to the Public Private Partnership Authority Act of 2017 and the participation of a leading international financial institution (IFI).
Yet, Section 5 (2) of the 2023 Public Private Partnership Authority Rules and Section 31 of the Act are identical.
It authorises direct contracting with an IFI as a transaction advisor as long as the board agrees.
Furthermore, the Pakistan Civil Aviation Authority (CAA) is seeking approval from the Public Private Partnership Authority Board to appoint an IFI as a transaction advisor for the outsourcing of the country’s three principal airports.
On January 11, 2023, the board approved the application. Upon approval, PCAA contacted all qualified IFIs to directly engage them as transaction advisors.
As a result, they were asked to submit any relevant material pertaining to the PCAA board-approved selection criteria.
They were later identified as a subject matter expert having the required credentials to function as transaction consultants.
In a draught deal advisory agreement, the IFC fully backed the views of the Ministry of Finance, Federal Board of Income, and Ministry of Foreign Affairs after a lengthy and rigorous approach (TASA).
TASA imposes penalties on clients who opt not to proceed with the transaction based on a success fee model. The operation of the three tragic airports must be outsourced, and our side must be politically solidly behind this.
The above-mentioned agreement and commitment will benefit the economy and promote healthy competition. Yet, it will also help to bolster the IFC‘s confidence.