ISLAMABAD: The Civil Aviation Authority’s board has decided to review the functional separation of the authority after incorporating all the concerns the members had expressed during a meeting held before Eidul Azha.

An informed source told Dawn that the idea for functional separation of the authority was presented before the CAA board after the cabinet committee overseeing the federal government’s plans for organisational separation of the CAA met the same day, July 29, before the board meeting.

The plans envisage creation of a “Pakistan civil aviation regulatory authority” (PCARA) and a “Pakistan airports authority” (PAA).

Under Section 7 of the Civil Aviation Authority Ordinance of 1982, the CAA board has the powers to run the authority’s affairs, but it has no power to take any decision regarding splitting the organisation.

Plan afoot to create a ‘Pakistan civil aviation regulatory authority’ and a ‘Pakistan airports authority’

The board meeting was presided over by Aviation Secretary and CAA chairman Hassan Nasir Jamy. Among others who attended the meeting were Air Marshal Ahmed Shehzad and Planning and Development Division Secretary Mathar Niaz Rana.

The meeting of the cabinet committee was presided over by Adviser to the Prime Minister on Commerce and Investment Razak Dawood. Federal Aviation Minister Chaudhry Sarwar Khan also attended the meeting.

In March last year, the government had developed the National Aviation Policy to make the role of CAA as a regulator completely independent of service providers, along with financial and administrative autonomy within two years.

The decision also requires achieving organisational change of the regulator with minimal adverse collateral disadvantage.

Subsequently, the federal cabinet approved in principle a proposal for segregation of the CAA’s regulatory and service provider functions and in its meeting on May 19 this year, the federal cabinet constituted a six-member cabinet committee under Razak Dawood. The aviation minister was one of its members.

Dr Ishrat Hussain, the convener of the Institutional Reforms Committee, had also participated in the proceedings.

The source said the cabinet committee was expected to submit its recommendations to the federal cabinet.

There is every likelihood that the cabinet committee may not meet again and instead, finalise its recommendations for the cabinet.

Two bills ready

Two draft legislative bills are ready — one aimed at replacing the existing CAA Ordinance of 1960 while strengthening the scope of the regulatory body in accordance with the international commitment.

The second bill proposes amendments to the CAA Ordinance of 1982 for ensuring establishment of an airport company under Companies Act of 2017 and enabling the companies to own the title and assets of airports ordered by the federal government.

The law, however, allows the government to transfer shares of the company to the private sector, besides allowing the transfer of employees from the CAA to the company on the same terms and conditions.

Originally, the source said, the plan to outsource airports was envisaged during the previous government of PML-N, but the scheme was shelved during its last days. When the Pakistan Tehreek-i-Insaf came to power, it decided to go ahead with the plan.

Now the CAA board has asked the Change Management Committee to go through the functional separation within the CAA and bring back the plan for consideration of the board by incorporating all the concerns expressed during the meeting, including security issues.

The segregation plan of the government includes outsourcing different airports in two phases — corporatisation of airports in the first phase for attracting private investors, while the second phase suggests completion of this transaction after co-opting the Privatization Commission by appointing financial advisers and investment banking firms.

Published in Dawn, August 4th, 2020