Staff Reporter
ISLAMABAD: The Federal Cabinet has officially canceled the tender for outsourcing Islamabad International Airport (IIA) under the Public-Private Partnership (PPP) framework due to disagreements over the revenue-sharing model.
According to the cabinet-approved tender guidelines, the government aimed to retain 56-57pc of both aeronautical and non-aeronautical revenues, leaving 43-44pc for the private operator.
However, the Turkish consortium TERG—including Terminal Yapi, ERG Insaat, and ERG U—submitted a bid offering 47.25pc for the private sector, failing to meet the Minimum Revenue Guarantee (MRG) set by the cabinet, leading to the rejection of the bid.
The Aviation Division stressed the strategic importance of Islamabad Airport as a key aviation hub, warranting greater state control over its airside and landside operations.
According to sources, Deputy Prime Minister, Ishaq Dar, played a significant role in overseeing the evaluation process, reflecting the high-level attention the matter received.
Despite Deputy Prime Minister Ishaq Dar’s involvement and expedited feedback from the Cabinet Committee on Privatization (CCoP), the inability to reach a consensus resulted in the tender’s cancellation.
The matter has been referred to the International Finance Corporation (IFC) for review, ensuring alignment with international best practices in airport management. Officials, including Deputy Prime Minister Ishaq Dar, emphasized that while private sector participation remains a priority, it must safeguard national interests and maximize public benefit. Future outsourcing may proceed through bilateral negotiations or revised tender processes.
