Key Takeaways
- Pakistan has formally appointed the Asian Development Bank (ADB) as financial and transaction adviser for outsourcing Islamabad International Airport’s operations.
- The agreement is expected to enhance airport efficiency and attract international investors, with a completion timeline of nine months.
- This marks the first instance of a multilateral organisation assisting in Pakistan's privatisation transactions.
Pakistan has officially engaged the Asian Development Bank (ADB) as the financial and transaction adviser for the outsourcing of Islamabad International Airport’s operations, according to an official announcement. The decision was made following approval by the Privatisation Commission Board last week.
Under the terms of the agreement, signed on Wednesday, ADB will provide comprehensive advisory services including technical, financial, legal, environmental, and commercial expertise. These services are aimed at supporting the structuring and implementation of the transaction in line with international best practices.
The privatisation process is expected to be completed within nine months, with a due diligence phase concluding within three months, as stated by a senior official during testimony before a Senate panel on Tuesday.
Muhammad Ali, Adviser to the Prime Minister on Privatisation and Chairman of the Privatisation Commission, expressed confidence in ADB’s ability to complete this transaction swiftly while ensuring maximum competition and transparency. The agreement is seen as a significant milestone in Pakistan's privatisation programme aimed at improving airport efficiency and service quality.
The outsourcing process will be conducted through a long-term concession framework under a competitive bidding process, with the government targeting completion during the current fiscal year. A single financial advisor has also been appointed for the outsourcing of Karachi and Lahore International Airports, with preparatory work already underway.
In February, the Privatisation Commission Board formed a negotiation committee to engage with ADB on terms for a financial advisory services agreement. The board expressed confidence in ADB’s expertise and experience, which would ensure successful completion of this important transaction while avoiding potential litigation as a multilateral agency.
The privatisation is expected to attract more than $500 million each in fresh investment into Karachi and Lahore International Airports, according to Muhammad Ali.
