Outsourcing of operations, land assets at three airports: TIP flags possible breach of PPP regulations

KARACHI: Transparency International Pakistan (TIP) has flagged a possible breach of Public Private Partnership (PPP) Authority Regulations 2023 in the outsourcing of operations and land assets at three major airports to the International Finance Corporation (IFC), the private sector arm of the World Bank Group.

The outsourcing of operations and land assets at three major airports to the IFC has come under the scrutiny of TIP after receiving a complaint alleging a violation of the Public Private Partnership Authority (Direct Contracting of IFIs as Transaction Advisers) Regulations, 2023 in the outsourcing of operations and land assets at three major airports to the IFC.

According to the complaint, the federal government engaged IFC as an advisor for the outsourcing process, violating transparency principles and the PPP Act 2017.

Airports at Karachi, Lahore and Islamabad: IFC team assessing prospects for outsourcing of services

The appointment of IFC as an advisor on an unsolicited basis and without open competition could potentially cause a loss to the national exchequer.

It says the IFC will receive $6 million as a success fee on the completion of the outsourcing of three airports, with $2 million fragmented against each airport. Pakistani airports generated about Rs90 billion in 2022, while over the next 30 years, they had the potential to generate more than Rs2,700 billion. However, outsourcing is taking place at Rs850 billion.

However, TIP has reviewed the allegations and found them to be correct, requesting Director General for Aviation to examine the allegations of the complaint in light of The Public Private Partnership (PPP) Authority Act Regulations, 2023 and if found correct, issue directives to the concerned departments to ensure compliance with PPP Act Regulations 2023 and issue an open tender for the selection of IFI as Transaction Adviser in outsourcing of operations and land assets at three major airports.

Moreover, TIP also urged the Director General of Aviation to ensure that the proper competitive and transparent process is adopted in outsourcing operations and land assets at three major airports to avoid a loss to the national exchequer, as a violation of rules may deem the procurement as mis-procurement.

Copyright Business Recorder, 2023