ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved the draft Transaction Advisory Agreement (TASA) for the hiring of the International Finance Corporation (IFC) as transaction adviser (TA) for outsourcing the three airports – Islamabad, Karachi, and Lahore.
The meeting of the ECC presided over by Finance Minister Ishaq Dar was submitted a summary by the Ministry of Aviation, on Thursday, in this regard.
The meeting was informed that outsourcing of three airports has been initiated within the scope of Public-Private Partnership Act-2017 to engage private investor, airport operator through a competitive and transparent process to run the airports, develop appertaining land assets and enhance avenues for commercial activities and to garner full revenue potential.
In this regard, the meeting was further informed that the International IFC, a part of the World Bank Group, has been qualified as a transaction advisor. The ECC after discussion approved the draft TASA reached with the IFC by Pakistan Civil Aviation Authority (PCAA) for outsourcing of three airports.
Three airports: ECC all set to reconsider engaging IFC as transaction adviser
An official said that the Ministry of Aviation while giving details and so far process with regard hiring of transaction adviser for outsourcing of airports requested to the ECC that the PCAA Board approved the presented draft TASA subject to legal vetting by the Ministry of Law and Justice.
At the same time, PCAA Board observed that since the TASA is based on a success fee model with penalties for failure to proceed with the transaction on the part of the client, there is a need for strong political commitment for the outsourcing of the operation of three target airports from our side.
The ministry added that in view of the past experience briefly mentioned in the summary, a clear demonstration of such a commitment will also be crucial not only for the completion of this process but more importantly, promoting a good competition and thus fetching the true monetary benefits from outsourcing of the airports.
At the same time, it will also help in building confidence of the IFC as to our adherence to the terms and conditions of TASA and payment of their fee etc. in dollar terms. For these reasons, the PCAA Board directed that the draft TASA should be placed before the Economic Coordination Committee of the Cabinet for their information and concurrence.
The ECC also considered and approved Ministry of Energy (Petroleum Division)’s proposal and approved declaration of commerciality and field development plan over Hilal and Iqbal discoveries in favour of M/s Mari Petroleum Company Limited (MPCL).
The meeting also granted second two years’ renewal over Kirthar exploration license block in favour of Polish Oil and Gas Company Limited (POGC), wef, 28-08-2022 as well as granted permission of extended well testing (EWT) over Ghazi-1 discovery to Mari Petroleum Company Limited (MPCL).
Additionally, the ECC also approved; (i) Technical Supplementary grants for the current fiscal year of 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 SDGs Achievement Programme (SAP) in the 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.
Copyright Business Recorder, 2023
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