The Aviation Division has opted to extend the deadline for bid submissions concerning the outsourcing of Islamabad International Airport (IIA) until March 15, 2024.
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Initial reports suggested that initially, four companies had expressed interest in managing the airport. However, the recent decline in international parties’ interest is reportedly linked to the stringent criteria set forth.
The proposal for outsourcing Islamabad International Airport was previously endorsed by the former government, urging bidders to submit proposals by November 8, 2023.
It’s worth noting that in August, the Executive Committee of the National Economic Council (ECNEC), upon the Ministry of Planning’s recommendation, sanctioned the outsourcing of IIA under the Public-Private Partnership (PPP) mode.
The government’s objective was not solely limited to raising funds but also encompassed the revamping of IIA’s existing infrastructure and associated amenities, aiming to attract private sector involvement.
According to the Planning Commission’s communication to the ECNEC, the proposed option-1 (PPP mode) generated a present value of $434 million, whereas option-2 (traditional mode) amounted to a present value of $409 million. Notably, option-1 presented an additional net value of $25.65 million. The valuation of project cash flows under both options was estimated utilizing a 12 percent discount rate.
Additionally, the Planning Commission outlined a 15-year concession period, with an estimated project cost of $135 million, out of which the successful bidder was slated to pay $100 million upfront to the Civil Aviation Authority.
