ISLAMABAD: Instead of going ahead with the privatisation of three airports, the Economic Coordination Committee (ECC) of the Cabinet Thursday approved the appointment of the International Finance Corporation (IFC) of the World Bank as transaction adviser for outsourcing the airports.
The Karachi, Lahore, and Islamabad airports will be outsourced under the Public-Private Partnership Act.
Chaired by Minister for Finance Ishaq Dar here, the committee considered various options to outsource the operation of Karachi, Lahore and Islamabad airports.
Accordingly, after due consideration of a request from the Pakistan Civil Aviation Authority (PCAA), the Public-Private Partnership Authority Board allowed them to directly engage IFC as the transaction adviser for outsourcing the operations of these airports.
The PCAA Board approved the presented draft TASA subject to legal vetting by the Ministry of Law and Justice.
At the same time, the PCAA Board observed that since TASA was based on a success fee model with penalties for failure to proceed with the transaction on the part of the client, there was a need for strong political commitment to outsourcing the operations of the three airports.
Also, the Ministry of Commerce withdrew its summary for imported urea on a 50:50 basis by the federal and provincial governments on imported 100,000 metric tons from China.
According to an official announcement issued by the Ministry of Finance, Ishaq Dar presided over the meeting of the Economic Coordination Committee (ECC) of the Cabinet on Thursday.
The ECC considered a summary of the Ministry of Aviation on the engagement of the International Finance Corporation as transaction adviser for the outsourcing of three airports.
It was informed that the outsourcing of three airports had been initiated within the scope of the Public-Private Partnership Act-2017 to engage private investors/airport operators through a competitive and transparent process to run the airports, develop land assets and enhance avenues for commercial activities and garner full revenue potential.
In this regard, the IFC, a part of the World Bank Group, has been qualified as a transaction adviser.
The ECC after detailed discussion approved the draft Transaction Advisory Agreement (TASA) reached with the IFC for the outsourcing of three airports.
The ECC also considered and approved the following summaries submitted by the Ministry of Energy (Petroleum Division);
i. Approved Declaration of Commerciality and Field Development Plan over Hilal and Iqbal discoveries in favour of M/s Mari Petroleum Company Limited (MPCL).
ii. Granted second two years renewal over Kirthar exploration license block in favour of Polish Oil & Gas Company Limited (POGC) w.e.f 28-08-2022.
iii. Granted permission for Extended Well Testing (EWT) over Ghazi-1 discovery to M/s Mari Petroleum Company Limited (MPCL).
Additionally, the ECC also decided to provide the following technical supplementary grants for the current fiscal year:
i. Rs607.6 million in favour of the Ministry of Energy (Power Division) for the execution of development schemes in Sindh province.
ii. Rs1,689.5 million in favour of the Ministry of Housing and Works for the execution of development schemes under the SDGs Achievement Programme (SAP) in KPK and Sindh provinces.
iii. Rs5,000 million in favour of the Ministry of Housing and Works for the execution of development schemes in erstwhile FATA.
The ECC deferred a summary submitted by the Ministry of Energy (Power Division) on the implementation agreement signed between the Government of Pakistan and K-Electric (Erstwhile KESC) on the pending issue of payment of duties and taxes.