On February 7th Pakistan Civil Aviation Authority (PCAA) posted an advertisement in national newspapers inviting international companies to bid for the “outsourcing” of three major airports. The advert stated that those interested in this proposition would be required to undertake “operation, management, maintenance and development” of any or all three major airports which are: New Islamabad International Airport, Allama Iqbal International Airport Lahore and Jinnah International Airport Karachi.
This announcement, which has largely passed under the mainstream media’s radar, has caused panic amongst the thousands of employees of PCAA and has triggered scathing criticism from legal experts and veteran politicians due to the government’s lack of transparency and purportedly illicit methodology employed in the making of this decision.
Currently, there are two separate cases challenging the government’s decision to “outsource” operations and management of the three major airports, one filed with the Lahore High Court (LHC) and the other with the Islamabad High Court (IHC).
The advertisement put forth the following aspects of airport operations up for grabs for interested parties:
- Airport operation and management.
- Passenger facilitation and handling.
- Complete management of land and airside/aerodrome operations.
- Maintenance and management of airport buildings, allied infrastructure including airside, equipment, systems, facilities etc.
- Ensure provision of adequate international standard ground handling facilities.
- Develop and exploit commercial concessions, airport retails, etc.
- Future development and expansion of airports infrastructure including runways, terminal building/satellites, avio-bridge, taxiways, cargo village, car parks, maintenance, and repair organization, etc.
Legal experts aware of this move told GVS that the government is misdirecting the public with regards to this decision by calling it “outsourcing” when it is in fact privatization.
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According to sources, the reason behind this misdirection is the fact that the law has defined a clear process and set of regulations regarding the privatization of any government asset. In order to bypass these regulations, the term “privatization” has been replaced with “outsourcing”
Currently, there are two separate cases challenging the government’s decision to “outsource” operations and management of the three major airports, one filed with the Lahore High Court (LHC) and the other with the Islamabad High Court (IHC).
Mubashir Hassan, a veteran politician, engineer, and close confidant of Zulfiqar Ali Bhutto, who also served as Finance Minister in Bhutto’s government, filed a petition with the LHC citing concerns over the lack of transparency and blatant efforts on part of the government to circumvent the law through subversive means.
The petition states that according to the Privatization Commission Ordinance (PCO) of 2002, there are elaborately defined procedures concerning the privatization of public assets which have been completely disregarded by the government in its endeavor to “outsource” functions of the PCAA.
The petition alleges that the government is in violation of the law because according to PCO only those assets which are approved and listed by the Cabinet Commission of Privatization (CCoP) can be subject to privatization. The assets, in this case, are the country’s major airports which have not been approved for privatization by the CCoP.
This could mean that these bidders may be able to acquire PIA’s debt from the PCAA which could prove very profitable for the private company in the long run.
On Tuesday, May 5th, Chief Justice Syed Mansoor Ali Shah of the LHC passed an order to immediately stay the privatization of Allama Iqbal International Airport. Although the order only concerns the Lahore airport it is being considered as a bold move on part of the CJ.
Previously, Deputy Director (Legal) Farooq Afzal of the PCAA informed the LHC bench that the matter of privatization of three airports had been postponed until June 3, requesting for more time for a detailed report on it.
Meanwhile, the petition filed with the IHC by employees of the PCAA is still pending. The petition of the PCAA employees cites yet another legal transgression of government in its decision to privatize the airports.
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It states that according to PCAA ordinance of 1982 all operations, management, development and maintenance of airports fall under the mandate of the PCAA and cannot be transferred to a private party. It also adds that handing over operations of an airport to a private company will endanger the national security of Pakistan as airports are sensitive installations.
Another uncertain aspect of this controversy is the question of Pakistan International Airlines’ (PIA) debt, a part of which is owed to the PCAA. PIA’s debt is estimated to be around Rs.300 billion. According to the advertisement published by the government, private parties who are able to secure the bid can “Develop and exploit commercial concessions, airport retails, etc.” This could mean that these bidders may be able to acquire PIA’s debt from the PCAA which could prove very profitable for the private company in the long run.
The government has not issued any official statement regarding the PCAA privatization attempt or the petitions against it.