Turkish bidder offers lower fee for Islamabad airport operations

A Turkish consortium aims to take over the operations of Pakistan’s Islamabad airport after offering a concession fee below the minimum threshold, Sadiq ur Rehman, the chairman of the bid evaluation committee, has said.

The cash-strapped South Asian country is looking to generate revenue by speeding up its privatisation push, including outsourcing the running of three major airports.

The consortium is comprised of Terminal Yapi, ERG Insaat and ERG UK, and was the only bidder.

It will pay the Pakistani government 47 percent of its revenue from operations in the form of a concession fee, short of the 56 percent minimum agreed, the aviation and airports authority said.

The matter will now be referred to the International Finance Corporation (IFC) – a member of the World Bank Group, which is advising Islamabad on the outsourcing – before Pakistan takes a decision on whether the bid can go through.

“The details of the financial proposal will be presented and forwarded to the IFC for further evaluation and submission of final reports,” said Rehman, the chairman of the bid evaluation committee and deputy director general of Pakistan Airports Authority.

Pakistan is also looking to offload a 60 percent stake in debt-ridden airline PIA  to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund programme.

A failed attempt to privatise the national flag carrier in October also received a single offer, well below the asking price.