Turkish group bids below minimum charge for Islamabad airport operations

• Pakistan wants to generate revenue by accelerating privatization.
• The matter will now be referred to the International Finance Corporation.
• The government also wants to offload its 60% stake in debt-ridden airline PIA.

KARACHI: A Turkish consortium, the sole bidder to take over the operations of Pakistan’s Islamabad airport, has offered a concession fee below the minimum threshold, the chairman of the bid evaluation committee said on Thursday.

The cash-strapped South Asian country is seeking to generate revenue by accelerating a privatization drive, including outsourcing the operation of three major airports.

The consortium, made up of Terminal Yapi, ERG Insaat and ERG UK, is offering to pay the government 47% of its revenue from operations in the form of a concession fee, less than the minimum 56% set by the government, said aviation and airport authority. .

The matter will now be referred to the International Finance Corporation (IFC) – a member of the World Bank Group, which advises Islamabad on outsourcing – before Pakistan decides whether the bid can go ahead.

“The details of the financial proposal will be presented and forwarded to IFC for further evaluation and submission of final reports,” said Sadiq ur Rehman, chairman of the bid evaluation committee and deputy director general of the Airports Authority of Pakistan.

Pakistan is also seeking to offload 60% of debt-laden airline PIA, opening a new tab on raising capital and reforming state-owned enterprises as envisaged under the International Monetary Fund’s $7 billion programme.

A failed attempt to privatize the national carrier in October also received a unique offer, well below the asking price.