Cash-strapped Pakistan to outsource Islamabad airport for 15 years amid debt crisis

Pakistan's Islamabad airport would be outsourced for 15 years to improve its ‘operational activities’, said Pakistan's Minister for Aviation Khawaja Saad Rafique while addressing the national assembly. The statement comes at a time when the country is facing a huge economic crisis, with staggering inflation and depleting Forex reserves, reported Geo news on July 21. 

Further, Pakistan's aviation minister Rafique clarified that the step does not equate to privatisation, instead, “it aims to bring in proficient operators to enhance airport operations”. While sharing details related to outsourcing the airport, he noted that open competitive bidding would be ensured, allowing the best bidder to be given the opportunity to operate the airport. He also shared that the process will be profit-oriented, ultimately benefiting the national exchequer. 

Pakistan dreaming of 'new airport' amid economic crisis 

While giving out the information related to the upcoming project, the Pakistan Minister for Aviation shared that the  International Finance Corporation would be serving as the consultant, and already 12 to 13 companies have shown interest in participating in the bidding process.  

According to Rafique, the process of the bidding would be kept transparent and adhere to all rules and regulations. However, he clarified that the runaway and navigation operations have been excluded from the outsourcing process. 

Pakistan and its economic debt

The decision to outsource comes after the International Monetary Fund (IMF) approved a USD 3 billion bailout to support Pakistan in avoiding a default on its debt repayments. Further, Pakistan has also received financial assistance from the UAE and Saudi Arabia totalling USD 1 billion and USD 2 billion, respectively. This would strengthen its diminishing reserves in addition to the IMF's relief. 

Apart from UAE and Saudi Arabia, China has come to "rescue" the cash-strapped country. As per the latest update, China has agreed to reschedule its debt of over $2 billion for a two-year period, providing a significant reprieve to the cash-strapped government. 

The move comes as Pakistan strives to rebuild its foreign exchange reserves through fresh loans. The Economic Coordination Committee (ECC) of the Cabinet, chaired by Finance Minister Ishaq Dar, granted approval to the revised terms of the agreement between Islamabad and Beijing. This decision was reported by senior Pakistani officials.