Pakistan to outsource major airports to foreign investors

ISLAMABAD: The government of Pakistan has decided to outsource the management and operation of its three major international airports to foreign investors in a bid to improve service delivery and attract foreign direct investment.

According to sources, a tender will be issued for outsourcing the Islamabad International Airport, the Allama Iqbal International Airport in Lahore, and the Jinnah International Airport in Karachi, in the coming weeks.

The tender will be published in international newspapers.

The sources said that the Islamabad airport will be outsourced in the first phase, followed by Lahore and Karachi airports in the subsequent phases.

The possibility of outsourcing the Skardu airport will also be considered.

The leading company awarded the contract for each airport will be responsible for opening duty-free shops and international brands, as well as handling all matters related to the decoration, maintenance, and cleanliness of the airport premises.

However, the security and air traffic control departments of the airports will remain under the supervision of the Civil Aviation Authority (CAA).

In addition, the Islamabad airport’s passenger capacity will be increased up to 13 million to accommodate the growing number of travellers.

The government indicated that it prefers “friendly countries’ firms” from Saudi Arabia, United Arab Emirates, Qatar, China and Turkey and will contract to outsource these airports for 25 years.

Pakistan’s decision to outsources airports

The decision to outsource the airports was approved by Prime Minister Shehbaz Sharif on December 30, 2022, after a meeting with the aviation ministry and other relevant authorities.

The prime minister had emphasised that the outsourcing of airports was a common profit-driven practice around the world, and that public-private partnerships were being implemented in 44 countries, including the United States, Britain, India, Bahrain and Brazil.

The Aviation Ministry of Pakistan stated that this was considered to be “a major decision to pave the way for foreign direct investment”, which will help to provide international standards and services at airports.

The move comes at a time when Pakistan is facing a sharp decline in foreign direct investment, which has dropped by more than 50% in the first five months of the current fiscal year, according to the State Bank of Pakistan.

The government hopes that outsourcing the airports will not only generate revenue for the government but also help improve facilities for international travellers.

The decision also coincides with the efforts of Pakistan International Airlines (PIA) to revive its faltering image and lift the ban imposed by the European Union Aviation Safety Agency (EASA) on its flights over safety concerns.