Pakistan kicks off outsourcing operations, assets at 3 airports to shore up forex reserves
2 min read 31 Mar 2023, 02:51 PM ISTAs per the finance ministry's statement, Islamabad has engaged the World Bank's International Finance Corporation as an advisor for the outsourcing process.
PremiumIn a move to generate foreign exchange reserves, the Pakistan government has announced that it will outsource operations and land assets at three major airports through a public private partnership.
The government initiated process to outsource operations at Karachi, Islamabad, and Lahore airports, as reported by DW.com. A report by Sputnik News has stated that the plans to outsource operations to the private sector will be for 25 years.
As per the ministry's statement, Islamabad has engaged the World Bank's International Finance Corporation as an advisor for the outsourcing process. "The outsourcing of three airports has been initiated within the scope of public-private partnership .. to engage private investor/airport operator through a competitive and transparent process to run the airports, develop appertaining land assets and enhance avenues for commercial activities and to garner full revenue potential," the ministry said.
No details of the partnership, or any agreement have been made official.
Pakistan, however, has been in talks with Qatar to jointly run terminals at Islamabad, Karachi and Lahore airports, Reuters has reported citing officials.
PM Shehbaz Sharif visited Doha late last year to garner Qatari investment in the country's energy and aviation sectors, which was followed by a pledge by the Qatar Investment Authority to invest $3 billion in Pakistan. Islamabad has been negotiating the deal with Doha for several months as part of an effort to find foreign investment for the cash-strapped nation of 220 million people.
Pakistan's aviation sector is struggling with the country's national flag carrier running accumulated losses of nearly 400 billion Pakistani rupees ($1.41 billion).
Pakistan is facing an acute balance of payment crisis with its central bank reserves dipping so low as to hardly cover four weeks of imports.
IMF and Pakistan are locked in a debate over an unfinished loan program required for the ongoing financial collapse. Both have been negotiating since early February on an agreement that would release USD 1.1 billion to the cash-strapped, nuclear-armed country of 220 million people, and it's supercritical for the liquidity-challenged country.
Meanwhile, the country's central bank is likely to raise its key interest rate by 200 basis points to a record high of 22 percent at its review on April 4, as it struggles to bring down stubborn inflation, the median estimate in a Reuters Poll showed.
Worldwide growth in consumer prices has compounded high inflation in Pakistan caused by a weakening currency, energy tariff increases and elevated food prices due to Ramadan.
The latest consumer price-based inflation clocked a 31.5 percent rise on year in February, the highest in nearly 50 years. Food, beverage, and transportation prices have all surged more than 45 percent. and the country is in talks with the IMF to unlock its next tranche worth around $1.1 billion as part of a $6.5 billion bailout agreement reached in 2019.
(With inputs from Reuters)
