Pakistan threw its hat into the airport privatization ring in 2020 when its government decided its aviation sector could become more profitable and more service-oriented. The country’s authorities may be learning something from its Indian neighbor where the airport privatization ball has been rolling with great success.

More than a year ago, Pakistan gave the go-ahead for a privatization process to operate Jinnah International Karachi Airport (KHI), Islamabad International Airport (ISB), and Allama Iqbal International Airport (LHE) under a public-private partnership (PPP) model.

Pakistan's Aviation Ministry said the move, via 15-year concessions, would “pave the way for foreign direct investment” in order to improve standards and services for passengers at its international airports.

According to the International Finance Corporation (part of the World Bank Group), Pakistan’s “first-ever airport PPPs are expected to transform the sector, maximize revenue for the government, and provide improved services to the public.”

India has eased rules for foreign private ownership whereas in Pakistan the foreign direct investment climate is not as open. Part of the problem lies with transparency; in the case of airports, potential investors may not be clear on the basics including the strategic aims of the Pakistan Civil Aviation Authority (PCAA).

In the recent Skytrax 2024 annual awards, Indian airports dominated the top 10 best airports in the South Asia category taking every position except seventh which went to Colombo in Sri Lanka. If Pakistan could make a regional impact here it would be a big win for the country.

Furthermore, in its global ranking for this year, Skytrax has four Indian airports in the top 100, led by Delhi at 36 plus, in order, Bangalore (up 10 places), Goa Manohar (a new entry), and Mumbai. All of them are majority privately owned.

First RFP for Islamabad

Last summer, the PCAA issued the RFP for the privatization of ISB, which serves the capital. This year, the aviation authority offered an extension for bid submissions with a new deadline of May 15, 2024*. The previous deadline was November 8, 2023.

According to local sources, interest in ISB has come from far and wide: Kuwait, Malaysia, Qatar, Türkiye, the United Arab Emirates (UAE), and several European countries such as Britain, France, Germany, Spain, and Switzerland.

However, there appear to be some hurdles for potential bidders including the length of the concession and even the responsibility for infrastructure expansion. These, and other points, raised by prospective bidders are detailed below, with PCAA’s initial answers.

[*On May 14, the deadline for submissions was again extended, this time to July 15, 2024.]

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