ECNEC approves proposal to partially outsource the Islamabad International Airport proposal 

Prime objective of outsourcing is to undertake modernisation of the existing infrastructure- Officials

ISLAMABAD: The Executive Committee of the National Economic Council (ECNEC) has approved six projects worth Rs 110.2 billion including the proposal to partially outsource Islamabad International Airport (IIA) under Private Public Partnership (PPP) mode.

Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar chaired ECNEC on Saturday.

The Ministry of Planning Development and Reform presented the outsourcing of IIA under the PPP modality in ECNEC.

The officials informed the chair that the prime objective of the project is not just to raise capital but to undertake modernization of existing infrastructure of IIA and associated facilities by attracting private sector participation. This would in turn help in mobilizating private finance, bringing in international expertise to improve service quality and efficiency, and implementing the latest international standards to stimulate aviation growth. 

The project scope involves maintenance, operations and rehabilitation of IIA landside facilities (passenger terminal, cargo terminal/facilities, parking) and apron along with its associated facilities. 

Management and operations of facilities and areas other than the project scope including Air Traffic control, runway, taxiway, fuel for, aircraft rescue and firefighting facilities will still be Civil Aviation Authority’s (CAA’s) responsibility.

Sources said that the present value generated by the project under the proposed option-1 (PPP mode) is $434 million whereas in option-2 (traditional mode) the present value of the project is $409 million. Based upon the present value, option-1 generates additional net value of $25.65 million. The present value of project cash flows under both options have been estimated using a discount rate of 12%.

Planning commission also informed the forum that the total concession period is 15 years and the estimated project cost is $135 million out of which $100 million to be paid to the Civil Aviation Authority upfront by the successful bidder. 

Sources said that the government under this project wants to turn the IIA into a profitable business endeavour. This will decrease and ultimately diminish public sector risk and existing liabilities through an improved and innovative operational solutions.

The ECNEC also considered and approved a Punjab Government project titled “Developing Resilient Environment and Advancing Municipal Services (DREAMS-I)” at a cost of Rs. 64.480 billion (USD 225 million) including ADB loan of Rs. 51.5billion (USD 180 million) and local component of Rs. 12.8 billion (USD 45 million) by the Punjab government. The project will enhance climate resilience and urban living and health conditions for about 2.9 million people in Rawalpindi and Bahawalpur cities of Punjab province.

The ECNEC also considered a project regarding the Prime Minister’s National Programme for Solarization of Agriculture Tube wells in Sindh, Punjab, Khyber Pakhtunkhwa and Balochistan provinces and allowed Islamabad Capital Territory(ICT) rural areas into the programme’s scope.

The ECNEC also considered and approved a revised/updated project of the Sindh Government titled “ Karachi Neighborhood Improvement project (KNIP)” at the cost of Rs. 18.8 billion (USD 85.610 million) including a World Bank loan of Rs. 16.7 billion (USD 76.067 million). The revised/updated project envisages the improvement/upgradation of infrastructure of Karachi City in Karachi South, Korangi and Malir districts.

The ECNEC considered and approved a project of Gilgit –Baltistan Government titled “Rural Development and Climate resilience Project” at an updated cost of Rs. 16.2 billion with foreign financing of Rs 11.0 billion. The project envisages to improve sustainability of living conditions and resilience to climate change and natural disasters of Gilgit-Baltistan households and communities.

The ECNEC also considered and approved a project titled “Feasibility/cost estimate for Dualization of Sialkot-Eminabad  Road upto  Kamoki including a link to Motorway: 65 kms” at the cost of Rs 10.8 billion with 50% cost sharing between Federal and Punjab Govt and employed the National Highway Authority (NHA) to execute the project.


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