The Pakistani government has approved the outsourcing of three major airports in Islamabad, Karachi, and Lahore to attract foreign investment and generate foreign exchange reserves. The decision was taken by the Economic Coordination Committee, which also approved the engagement of the International Finance Corporation (IFC) as a transaction advisor for the outsourcing process. The move will be carried out under the Public-Private Partnership Act-2017 to engage private investors and airport operators through a competitive and transparent process. The outsourcing process will allow private operators to develop land assets and enhance commercial activities at the airports to generate full revenue potential. The three airports will be run by international operators to provide world-class facilities to passengers.
Pakistan has been struggling with an acute balance of payment crisis due to dwindling foreign exchange reserves. The country’s national flag carrier has accumulated losses of nearly Rs400 billion Pakistani rupees, and its central bank reserves are dipping so low that they hardly cover four weeks of imports. As of March 24, the foreign exchange reserves held by the State Bank of Pakistan decreased by $354 million to $4.2 billion. The move to outsource major airports is part of an effort to find foreign investment for the cash-strapped nation of 220 million people.