A cash-starved Pakistan has been pushed to outsource the operations of the Islamabad International Airport, as per a report in the Pakistani newspaper Dawn.
Ishaq Dar, the finance minister in the Shahbaz Sharif-led government, has told stakeholders to finalise the formalities for the outsourcing by August 12, the daily reported, citing sources. Dar chaired a meeting of the steering committee to evaluate the progress of the outsourcing process on Saturday, and issued directions to complete the procedure on priority, as per the report.
Notably, the decision comes before the end of the incumbent government’s term and the dissolution of the National Assembly on August 13.
Further, in the meeting on Saturday, the finance minister instructed the concerned departments to finalise amendments to civil aviation laws and formulate a plan for the restructuring of Pakistan International Airlines (PIA) by the end of this month. The changes in the law will aim to segregate the functions of the Pakistan Civil Aviation Authority, PIA, and Airports Security Force, to eliminate overlapping responsibilities.
An official announcement issued after the meeting said that the World Bank’s International Finance Corporation (IFC), the transaction adviser for the outsourcing, had briefed the meeting on the roadmap for the process.
According to Dawn, Pakistan’s Economic Coordination Committee had decided to begin the 25-year outsourcing of operations and land assets at Islamabad, Lahore, and Karachi airports on March 31. The operations of these hubs will be run in a public-private partnership to boost foreign exchange.
The country, which is fighting an acute balance of payments crisis and falling foreign exchange reserves, was granted a $3 billion bailout by the International Monetary Fund (IMF) last week. The Stand-By Arrangement (SBA) will make the total amount available to Pakistan, spread over nine months.
The new Stand-By Arrangement (SBA) will support the authorities’ immediate efforts to stabilise the economy … [and] will also create space for social and development spending through improved domestic revenue mobilisation and careful spending execution,” the IMF had said in a press release.
Despite the larger-than-expected IMF bailout, the agreement had stressed that Pakistan will have to continue to mobilise multilateral and bilateral financial support. Pakistan needs $22 billion to fund its external payment obligations, including international debt servicing, in the financial year 2024, as per a report by news agency Reuters.
