Turkish Consortium's Sole Bid Fails to Meet Pakistan's Revenue Target
Picturing a modern airport bustling with international travelers, it might be hard to believe that Islamabad International Airport has just one bidder interested in taking over its operations—and even that isn’t quite what the government in Pakistan had hoped for. Islamabad Airport, a key gateway for the capital, received a lone offer from a Turkish consortium led by Terminal Yapi, ERG Insaat, and ERG UK. Their proposal? They’ll hand over 47% of annual revenue as a concession fee for the rights to manage the airport. That would sound decent, except it falls short of the government’s expectations—by a good margin.
According to Sadiq ur Rehman, who chairs the bid evaluation panel for the Pakistan Airports Authority, the government set a minimum bar: bidders were expected to offer at least 56% of revenues as a concession. The Turkish bid slides right under that threshold. This is about more than just numbers. The roots of this privatization drive stretch deep into Pakistan’s financial issues, as Islamabad scrambles to fix its battered balance sheet and show progress to international lenders like the IMF.
Privatization Efforts Face Repeated Setbacks
Pakistan’s recent history with privatization has been rocky at best. Just a few months back, authorities tried to auction off a controlling stake in the national carrier, Pakistan International Airlines (PIA), asking private investors to buy 60% of the debt-ridden airline. The result? No takers, and the sale fizzled out. Now, with the eyes of international creditors locked onto Pakistan’s next moves, the urgency to deliver on promised reforms is even higher.
The airport management deal is just one piece of a broader reform puzzle. Outsourcing the management of Islamabad, Lahore, and Karachi airports ranks high in the government's plan to unlock quick cash and improve efficiency, all while demonstrating commitment to the IMF-linked reform agenda. But with only one bid—and that too below requirements—the process has hit an awkward pause.
Authorities aren’t rushing this decision. The Turkish consortium’s proposal has been pushed up the chain to the International Finance Corporation (IFC) for a technical and financial review. On top of that, a legal review is underway. Pakistan officials were quick to clarify that, as of mid-January 2025, no green light has been given. They’re walking a tightrope: the country needs the deal to work, but not at the cost of underselling critical infrastructure.
The whole episode reveals just how complex big privatizations have become in Pakistan. International investors hesitate over regulatory uncertainty. Local watchers worry about strategic assets slipping into foreign hands. And the government, caught in a race against time and economic pressures, must now hunt for a solution that answers to both the IMF and its own people.
- Islamabad Airport saw only one privatization bid, with the offer set at 47% revenue share—significantly below expectations.
- The proposal is now under review by the IFC and legal advisors.
- This comes after the failed privatization of PIA, reflecting ongoing challenges within Pakistan’s economic reform agenda.
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