Caretaker govt tells Senate: PIA sell-off plan still there in line with IMF deal

ISLAMABAD: The caretaker government informed Senate on Friday that the plan to privatise the loss-making national flag carrier, Pakistan International Airlines (PIA), is still there besides outsourcing its airport operations in line with an International Monetary Fund (IMF) deal.

Caretaker Minister for Information and Broadcasting Murtaza Solangi while responding to a calling attention notice in the Senate said that “PIA is still present on the privatization list”.

He said that the previous government of Pakistan Democratic Movement (PDM) had devised a privatization plan and the caretaker government is implementing it.

Funding PIA termed ‘challenging’ due to IMF programme

He said that PIA’s flight operation, disturbed due to a halt in fuel supply, has been normalised as funds were arranged for fuel provision. He emphasized that issues related to PIA span over several successive governments, adding a threadbare discussion on the national flag carrier in the presence of ministers for aviation and privatization is needed for finding a solution to the issues faced by the national flag carrier.

In a written reply to a question, the minister for aviation said that a transaction advisory services agreement (TASA) has been signed by Pakistan Civil Aviation Authority with International Finance Corporation (IFC), a subsidiary of World Bank Group on April 11 this year after obtaining approval from the then federal cabinet in line with the Public-Private Partnership Authority (P3A) Act and its relevant regulations for outsourcing the operations of three international airports of Islamabad, Karachi, and Lahore.

“A steering committee constituted by the then prime minister (Shehbaz Sharif) has been overseeing the process of outsourcing of airports headed by finance minister.

IFC will act as a transactional advisor for the outsourcing of airports. Islamabad International Airport has been selected to be outsourced at first for which tender documents have been advertised in international and national press with the date of opening of bids fixed as 9th November 2023.

In this regard, a pre-bid meeting has been held on 26th September 2023. It has also been decided that Islamabad International Airport would be outsourced for a period of 15 years, whereas the time period of the remaining two airports would be decided by the federal government on the basis of the detailed study to be prepared by IFC.

The name of the successful bidder will be known once the bidding process is completed. It is expected that award of concession for outsourcing of Islamabad International Airport should be completed before June 2024.

Another important aspect that needs to be highlighted is that only the operation and management of Passenger Terminal Building, the landside of the airport including car park and its apron, as well as, cargo terminal shall be outsourced for Islamabad International Airport whereas airside including the runways and taxiways, rescue and fire fighting services, air traffic control tower, as well as, the air navigation services such as air traffic services, navigational services, radar, etc.. shall remain with CAA,” he added.

He said that it has also been decided to outsource the remaining two airports in a sequence, i.e., one by one, adding: “Necessary analysis in this regard for Islamabad International Airport has been completed.

The amounts to be earned would be on the basis of two aspects namely a fixed initial amount to be paid by the successful bidder at the time of award of work and a percentage of revenue earned from the airport. However, a one-time initial payment of $100 million would be required to be paid by the successful bidder”.

He said that the amounts for airports located in Karachi and Lahore would be finalised on the basis of the analysis prepared by IFC in due course of time.

Speaking on a point of order, the opposition leader in Senate Shahzad Waseem called for devising a mechanism for timely signing of bills passed by National Assembly and Senate.

Copyright Business Recorder, 2023