Turkish consortium offers below minimum fee for Islamabad Airport operations

A three-party Turkish consortium, the only bidder to take over the operations of Islamabad airport, has offered a below minimum fee, the chairperson of the bid evaluation committee said on Thursday, leaving the decision on a potential deal in the hands of international advisor on the matter.

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

The consortium, comprising Terminal Yapi, ERG Insaat and ERG UK, bid to pay the government 47% of its revenue from operations in the form of a concession fee, short of the 56% minimum set by the government, 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 Sadiq ur Rehman, the chairman of the bid evaluation committee and deputy director general of Pakistan Airports Authority.

Pakistan is also looking to offload a 60% stake in debt-ridden airline Pakistan International Airlines (PIA), opens new tab 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.