Pakistan’s federal cabinet has approved a government-to-government (G2G) agreement to hand over the operations of Islamabad International Airport to the United Arab Emirates. This move, announced by Deputy Prime Minister and Foreign Minister Ishaq Dar, is designed to draw foreign investment and inject fresh expertise into Pakistan’s aviation sector, which has struggled with service shortfalls and financial pressures.
Formation of the Negotiation Committee
A high-level Negotiation Committee will finalize the handover details. Chaired by the prime minister’s adviser on privatisation, it includes representatives from the ministries of defence, finance, law and justice, and privatisation. This body will negotiate operational terms, performance benchmarks, and revenue-sharing mechanisms under the G2G framework.
Tied to IMF Bailout and Broader Privatisation
This agreement is part of Pakistan’s broader pledge to privatise or outsource state-owned enterprises under the USD 7 billion bailout accorded by the International Monetary Fund in September 2024. Alongside Islamabad airport, Pakistan International Airlines and various electricity generation and distribution firms are slated for privatisation or management contracts to shore up fiscal stability.
Airport History and Operational Hurdles
Inaugurated in 2018 at a cost exceeding USD 1 billion, Islamabad International Airport replaced the older Benazir Bhutto International Airport. Despite its modern infrastructure, the facility has drawn criticism over construction delays, inadequate passenger amenities, and operational inefficiencies that have dented traveller confidence.
Expected Gains and Future Outlook
Officials anticipate several key benefits from the UAE partnership:
- Enhanced operational expertise and airport management best practices
- Improved passenger services, facilities, and on-time performance
- Job creation through expanded commercial activities and airport services
- Strengthened positioning of Islamabad as a regional and international aviation hub
The government is also exploring similar management contracts for Karachi and Lahore airports, though formal agreements have yet to be signed.
