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Pakistan Privatises Islamabad Airport After UAE Withdraws from Outsourcing Deal

Pakistan has decided to privatise Islamabad International Airport after a planned outsourcing deal with the United Arab Emirates collapsed. The UAE repeatedly delayed nominating a management entity, leading to a deadlock between the two nations. The Pakistani government had also declined UAE requests to include Karachi and Lahore airports in the agreement. This move follows the privatisation of Pakistan International Airlines and highlights ongoing issues with loss-making state-owned enterprises.

Key Points: Pakistan to Privatise Islamabad Airport as UAE Deal Fails

  • UAE delayed nominating entity for airport management
  • Pakistan moved airport to privatisation list
  • UAE sought inclusion of Karachi, Lahore airports
  • Pakistan declined UAE's air link privatisation request
  • State-owned enterprises face losses before distress sales
2 min read

Pakistan to privatise Islamabad Airport after UAE withdraws from outsourcing deal

Pakistan moves to privatise Islamabad International Airport after UAE withdraws from management outsourcing agreement, citing delays and lost interest.

"Abu Dhabi apparently 'lost interest in the process' - The Express Tribune report"

New Delhi, Jan 24

The Pakistan government has moved ahead with privatisation plans of Islamabad International Airport after it shelved a plan to outsource the management and operations to the United Arab Emirates as Abu Dhabi apparently "lost interest in the process", a new report has said.

The UAE repeatedly delayed nominating an entity for the outsourcing of Islamabad International Airport leading to a deadlock between the two countries, report from The Express Tribune said, citing sources.

Sources said the Pakistani side sought a clear response from the UAE by sending a final call letter, however, the UAE responded saying it confirm any nominated entity, the report claimed.

The government has now moved Islamabad International Airport into a list of institutions to be privatised. Earlier, the country had privatised Pakistan International Airlines (PIA).

The government had not acceded to the UAE's request for inclusion of Jinnah International Airport (JIAP), Karachi, and Allama Iqbal International Airport (AIIAP), Lahore, in the draft government-to-government (G2G) framework agreement, the report said.

Further, Abu Dhabi's request for privatisation of the air link between Abu Dhabi and Pakistan under the draft G2G framework agreement was also overlooked by Islamabad, the report indicated.

A delegation led by the Adviser to the Prime Minister on Privatisation, along with senior officers from the concerned ministries, also visited Abu Dhabi to hold meetings with UAE officials to discuss and finalise the draft framework agreement.

The Privatisation Division had earlier submitted a summary to the Cabinet Committee on Privatisation (CCoP) proposing the inclusion of Islamabad, Karachi and Lahore airports in the active privatisation list for outsourcing.

A recent report said that poor governance and mismanagement due to political interference are leading to huge losses in Pakistan's state-owned enterprises, after which they are put up for distress sale at throwaway prices.

State-owned enterprises keep being retained despite declining performance and weak accountability. Once they have accumulated massive losses and unsustainable debt, privatisation is considered, the report said.

- IANS

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Reader Comments

P
Priya S
The UAE backing out is a clear signal. Even they can see the operational and governance risks are too high. When a friendly nation hesitates, it speaks volumes about the internal state of affairs. Privatisation might be the only way to save these assets now.
A
Aman W
Interesting to see the dynamics. Pakistan didn't agree to include Karachi and Lahore airports in the deal? That might have been a deal-breaker for the UAE. You can't expect a major investor to only take the smaller airport while leaving the bigger, potentially more problematic ones. Strategic error.
S
Sarah B
From an economic perspective, this is a classic case of "distress sale." The value they'll get now will be far less than if the airport was managed properly from the start. It's a lesson for all governments: maintain your crown jewels, or you'll have to pawn them.
V
Vikram M
The report mentions "political interference" as a key reason for losses. Sounds very familiar. We've seen how political meddling ruins PSUs. Hope the privatisation brings in professional management and improves services for travellers. Airports are the first impression of a country! ✈️
K
Karthik V
While it's easy to comment on their situation, we must also look inward. Are we ensuring our airports and other infrastructure projects are free from similar issues of mismanagement? Competition and transparency are key. Let's not be complacent.

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