THE government decision to ‘outsource’ the operations and land assets of the three main airports in Lahore, Karachi and Islamabad is a welcome development, and anticipates a significantly large investment from Qatar. That the government has decided to transfer these airports to private operators through public-private partnership, instead of going for outright privatisation, will help it circumvent long and tedious processes and avoid controversies associated with such policy actions in Pakistan. The Economic Coordination Committee has also approved the hiring of the International Finance Corporation — the private sector arm of the World Bank Group — as transaction adviser, which shows that the authorities are trying to expedite matters. Nonetheless, it is difficult to expect the whole process to conclude without any challenge from domestic airlines and the political opposition.
The trend to privatise, or transfer the management and operations of airports to private investors or private operators, has been growing worldwide since the early 1980s. This has both its advantages and disadvantages. But studies on such experiments elsewhere have shown that the benefits far outweigh the costs. The main benefit of any form of privatisation is the fact that it increases efficiency through investment in technology and the automation of processes to provide passengers reliable and less costly services. As the number of passengers travelling by air rises, the present infrastructure at Pakistani airports is coming apart. The situation requires massive capital investment in expansion and upgradation. With the government strapped for cash, private operators are in a better position to determine when and where to spend money to improve service delivery in order to facilitate the passengers without burdening taxpayers. The handing over of these airports to private operators should hopefully pave the way for more foreign airlines too begin flight operations in Pakistan or use one of the airports as their regional hub. If that happens, it will be a huge boost to the local tourism industry.
Published in Dawn, April 1st, 2023