A Turkish consortium, consisting of Terminal Yapı, ERG Inşaat, and ERG UK, is the sole bidder for the operation of Islamabad International Airport but has offered a concession fee below the government’s minimum threshold.
The consortium proposed to pay the Pakistani government 47% of revenue from the airport’s operations, falling short of the required 56% minimum.
The matter will now be referred to the International Finance Corporation (IFC), a World Bank affiliate, for a thorough evaluation. The IFC will submit its findings by January 9, 2025, after which the final decision will rest with the Pakistan Airports Authority (PAA) and the federal cabinet. This move comes as Pakistan aims to boost revenue through privatization, including outsourcing operations at key airports.
A bidding ceremony for the Islamabad airport’s outsourcing was held at PAA’s Karachi headquarters. The bid, opened on October 7, offered 47.25% of the project scope as the concession fee, below the required 56% threshold. The IFC, acting as the transaction advisor, will review the proposal before the PAA makes its final decision.
In 2023, Islamabad International Airport recorded its highest passenger flow, with a total of 6 million passengers passing through. The Civil Aviation Authority (CAA) reported that domestic flights accounted for approximately 1.5 million passengers across 11,000 trips, while international flights served about 4.5 million individuals.
In addition to the Islamabad airport, Pakistan is also seeking to sell a 60% stake in Pakistan International Airlines (PIA) to address its mounting debt, as part of a broader reform agenda linked to a $7 billion International Monetary Fund (IMF) program. However, a previous attempt to privatize PIA in October also attracted only a single, low bid.
Despite earlier reports, Turkish Airlines has denied any interest in acquiring a stake in PIA.
Meanwhile, the Steering Committee for outsourcing Islamabad Airport, chaired by Deputy Prime Minister Ishaq Dar, has directed the Ministry of Aviation to speed up the process, acknowledging that the Turkish consortium is technically qualified.