By Staff Reporter
ISLAMABAD: Pakistan formally appointed the Asian Development Bank as transaction adviser for the outsourcing of Islamabad International Airport on Wednesday, deploying a multilateral institution for the first time in the country’s privatisation program as it works to meet commitments tied to its International Monetary Fund loan.
The Privatisation Commission and the ADB signed a transaction advisory services agreement in Islamabad, with Commission Director General Shahid Dayo and ADB Pakistan Country Director Emma Fan putting pen to paper on behalf of their respective institutions. The signing followed approval last week from the Privatisation Commission Board, which reviewed the terms of the agreement before clearing it.
Muhammad Ali, adviser to the prime minister on privatisation and chairman of the Privatisation Commission, witnessed the ceremony alongside Commission Secretary Usman Akhtar Bajwa, Privatisation Division Secretary Hammad Shamimi and ADB Deputy Country Director Syed Hussain Haider.
Under the terms of the deal, the ADB will provide technical, financial, legal, environmental and commercial expertise to structure and implement the transaction according to international best practices. The commission said the arrangement is designed to produce a transparent, competitive process capable of drawing major international airport operators and investors.
The government intends to hand Islamabad’s airport to a qualified private operator under a long-term concession, selected through competitive bidding. Officials are targeting completion of the sale within the current fiscal year — a timeline that appears tight given the mechanics involved: a senior Privatisation Commission official told a Senate panel on Tuesday that due diligence alone is expected to take three months, with the full outsourcing process running roughly nine months.
Getting the ADB to the table required months of negotiation. The board established a committee in February to hammer out terms for a financial advisory agreement, ultimately settling on revised language that grants the lender indemnity protections reflecting its status as a multilateral institution — a provision intended to shield the ADB from litigation risk. The Cabinet Committee on Privatisation signed off on the negotiated terms before Wednesday’s signing.
The airport deal is the leading edge of a broader push. Officials plan to begin the search for financial advisers to handle the parallel outsourcing of international airports in Karachi and Lahore immediately, after earlier government-to-government talks on those facilities failed to gain traction. Ali told Dawn in recent days that each of those two airports is expected to draw more than $500 million in fresh investment.
The Islamabad transaction sits at the center of a privatization program that the government elevated to a top priority in June 2024, when it directed that the capital’s airport be the first state asset offered to private control. The broader effort forms part of the structural changes Islamabad agreed to under its IMF program, aimed at trimming the fiscal drag of state-owned enterprises while sharpening the efficiency of public services.
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