ISLAMABAD: The government on Thursday formally approved Aviation Policy for partial outsourcing of all major airports to foreign operators and tax-free investment opportunities in the aviation industry.

In a meeting chaired by Finance Minister Ishaq Dar, the Economic Coordination Committee (ECC) of the Cabinet lifted a complete ban on import of wheat products imposed a couple of months ago and instead imposed uniform 25pc regulatory duty on the import of wheat and wheat products with immediate effect.

The decision would support local farmers at the expense of local consumers against falling international prices.

The ECC also extended the period for export of 1.2 million tonnes of wheat for Punjab and Sindh by one month. The new cutoff date for Sindh will now be April 30 and for Punjab May 15.

The ECC set a target of 6.6m tonnes of wheat procurement by the provinces and Passco for wheat crop 2014-15 at a cost of Rs222bn.

The meeting also imposed 12.5pc regulatory duty on import of hot-rolled products and pipes and approved a facilitation package for coal-based power projects.

The aviation policy to be unfolded on Friday also entails outsourcing of north sector airports, like Gilgit, Chitral and Skardu terminal buildings to the private sector for promotion of tourism and connectivity and seeks to transform Civil Aviation Authority (CAA) into an independent regulatory authority by shedding its responsibility of operations of the airports.

Public-Private Partner-ship model shall be introduced for airport operations, management and development while management of landside and terminal buildings would be outsourced to world renowned foreign companies in airport business through a transparent process at Lahore, Karachi and Islamabad airports by engaging the International Finance Corporation (IFC).

Chief operating officers (COO) will be introduced for all major airports while cargo villages in Lahore, Islamabad and Karachi shall also be established. The draft aviation policy emphasises relaxation in the tax regime to encourage growth of the sector.

The policy sought to allow new airline licences for passenger and cargo services to the private sector and encourage utilisation of airports for regional trans-shipment.

For achieving this, the new licences would be issued to firms having a minimum paid-up capital of Rs500 million for regular public transport both for passengers and cargo.

Charter domestic licences would be available to companies having a paid-up capital of Rs25-50m and international charter airlines while licences would be available for aerial work, domestic and international and flying schools having a paid-up capital of Rs13-25m.

There would be no landing and housing charges at secondary airports for scheduled services and competition would be encouraged for aviation services.

The country will continue to allow open skies policy for cargo operation.

The private sector would be free to construct, operate and run new and existing airports and airstrips, lakes for amphibian aircraft operations, helipads and heliports, including cargo complexes on build, own and operate, build, operate and transport mechanism or any other management arrangement to generate aeronautical revenues.

The ECC also approved Rs96m payment of three months’ salary to the employees of Pakistan Machine Tool Factory (PMTF) Karachi.

Power sector

The ECC approved the Standardised Project Agreements for solar energy-based projects under the policy for development of renewable energy for power generation.

The committee also approved standardised security documents for coal power projects to facilitate such projects on domestic, imported and minemouth coal.

It promised that the federal government would provide guarantees that the revolving escrow account (equal to 22pc of monthly invoicing) for the China-Pakistan Economic Corridor (CPEC) power projects are opened and maintained by the power purchaser.

Published in Dawn, March 20th, 2015

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