ADB cleared to advise on Islamabad airport outsourcing

ISLAMABAD: The Privatisation Commission Board has approved an agreement with the Asian Development Bank (ADB) to provide transaction advisory services for the planned outsourcing of Islamabad International Airport’s operations.

The decision was taken at a board meeting on Friday chaired by Adviser to the Prime Minister on Privatisation and Privatisation Commission Chairman Muhammad Ali. The board examined the terms settled with the ADB and gave its approval, after a negotiation committee formed in February had engaged with the lender on the financial advisory arrangements and was tasked with bringing its recommendations back to the board.

Under the approved plan, Islamabad International Airport is to be handed to a qualified private operator through a long-term concession to be awarded via competitive bidding. The board said it expected the ADB’s experience to help conclude the process quickly while maintaining competition and transparency.

Government targets deal in current fiscal year

The government aims to complete the outsourcing of Islamabad airport during the current fiscal year. The advisory contract with the ADB was adjusted in some areas before approval, including changes to certain indemnity provisions because of the bank’s multilateral status. The Privatisation Commission’s negotiated contract terms had already been cleared by the Cabinet Committee on Privatisation.

The airport outsourcing is being pursued with the stated objective of improving efficiency, upgrading passenger services and bringing operations more in line with international standards. In June 2024, the government made privatisation a central policy priority and decided that Islamabad International Airport would be the first airport to move through this process.

In his FY25 budget speech, Finance Minister Mohammad Aurangzeb said the government should not remain engaged in commercial activity. He said “The prime minister strongly believes in reducing government interference in the commercial space and promoting the private sector; that is why we have made privatisation a key priority.”

Karachi and Lahore processes to begin

Work on hiring financial advisers for the outsourcing of Karachi and Lahore international airports would start immediately, as earlier government-to-government discussions had failed to move forward as anticipated. Muhammad Ali said that both airports were expected to draw more than $500 million each in new investment.

Separately, the board approved the appointment of BDO Ebrahim and Company as external auditor for the three financial years from 2025–26 to 2027–28, acting on the recommendation of its Audit Committee. An official statement said the board also reaffirmed its commitment to transparency, efficiency and high standards in order to strengthen investor confidence in the privatisation programme.