The government of Pakistan reportedly intends to facilitate the outsourcing through an open tendering process to attract foreign investment into the aviation sector.
Qatar is mulling opportunities to modernise and manage key aspects of Pakistan’s airport infrastructure, according to local Pakistani media.
Sources quoted by a private television channel revealed that these companies plan to introduce advanced facilities, including five-star hotels, as part of the outsourcing scheme.
The government of Pakistan reportedly intends to facilitate the outsourcing through an open tendering process to attract foreign investment into the aviation sector. The World Bank’s subsidiary, the International Finance Corporation, is playing a key role in the process, acting as financial advisors for the airport outsourcing.
Among the interested parties, the Bin Laden Group of Saudi Arabia has expressed its intention to join the competition, focusing on airport management outsourcing.
The Qatari government has reportedly indicated a preference for the cargo sector of the airports, though no official announcement has yet been made.
On Friday, the Pakistan aviation minister made a key announcement about outsourcing the management of the Islamabad International Airport. The aim is not privatisation, but to engage skilled operators to optimise airport operations, according to the minister.
The Islamabad airport, which replaced the defunct Benazir Bhutto International Airport in May 2018, is the country’s largest airfield in terms of cargo and passenger capacity. With annual passenger numbers of 9 million, it is the second busiest airport after Jinnah International Airport in Karachi.
“Open competitive bidding would be ensured, allowing the best bidder to be given the opportunity to operate the airport,” the aviation minister, quoted by Pakistan’s state-run APP news agency, stated during a parliamentary session.
It was also revealed that 12-13 companies have shown interest in the bidding process, underscoring the potential international investment on the horizon. The minister highlighted the successful outsourcing model used in airports in other countries, including India and Turkey, with specific mention of the efficient management of the Madinah airport.
However, the minister clarified that the outsourcing would not include runway and navigation operations at Islamabad airport and said existing employees would retain their jobs and privileges.
The minister also emphasised the need to address the considerable deficit of the Pakistan International Airlines (PIA), which has reached Rs80 billion this year and is projected to rise to Rs259 billion by 2030 if not managed properly.
What does it mean for a government to outsource an airport?
Outsourcing an airport generally refers to the practice where government bodies or airport authorities contract third-party companies to manage and operate various aspects of the airport’s functions.
This could include a range of services such as maintenance, security, cargo handling, retail, catering, cleaning, parking, passenger services, and sometimes, the management of the entire airport.
The idea behind outsourcing is to leverage the specialised expertise, efficiency, and potentially cost-effective services of these companies to improve the quality of the airport’s operations and customer service.
Outsourcing does not mean selling the airport to a private company. The ownership of the airport usually remains with the government or the airport authority, and they retain control over key aspects like runway and navigation operations.
The outsourced companies operate under a contractual agreement for a set period, as is the case with Islamabad International Airport, where the management is to be outsourced for a period of 15 years.
