Pakistan's Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) approved on Thursday a plan to hand over operations of Islamabad International Airport (ISB) to the United Arab Emirates under a government-to-government (G2G) framework.
Pakistan hopes the Transfer Islamabad Airport Operations to UAE decision will restore credibility, attract international airlines, and boost economic growth.
The agreement, to be concluded under a government-to-government (G2G) model, is taking shape as Pakistan seeks to privatize or outsource management of several state-run enterprises under conditions agreed with the International Monetary Fund (IMF) in September last year.
Led by Pakistani Deputy Prime Minister and Foreign Minister Ishaq Dar, the "first-of-a-kind" meeting marked a significant shift in the management of one of the country’s key transport hubs, signalling Pakistan’s intention to leverage foreign expertise and investment to enhance operational efficiency.
“Today [Aug. 28] we decided to finalize arrangements with the UAE government through a G2G framework agreement for the transfer of operations of Islamabad International Airport,” Deputy Prime Minister and Foreign Minister Ishaq Dar said in a statement after chairing a meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions.
A dedicated team, led by Pakistani Prime Minister’s Adviser on Privatisation Muhammad Ali and including senior officials from Defence, Finance, Law and Justice, and Privatisation ministries, will now finalise the terms of the agreement.
“The government is committed to ensuring that this partnership serves Pakistan’s national interests while improving airport operations to international standards,” said Ishaq Dar during the meeting.
The arrangement aims to secure a smooth transition of management and strengthen Pakistan’s connectivity, critical for economic growth and regional co-operation.
Officials also highlighted that the deal fits into a broader strategy to deepen Pakistan’s relations with the UAE – a growing regional power and vital economic partner amid increasing competition and economic challenges in the region.
Understandably, the CCoIGCT will oversee negotiations closely to ensure the agreement delivers on its promise of boosting Pakistan’s aviation sector and attracting foreign investment.
The development is taking place to aid Pakistani government's drive to secure foreign investment in critical infrastructure. Earlier this year, the government said it was considering offering management contracts for other major airports in the country, though no final arrangements have been announced.
Pakistan International Airlines (PIA), and state-owned electricity generation and distribution companies, are already on the government’s privatization list, while authorities have been looking for international partners to modernize airports and improve services.
Worth noting here, Pakistan’s aviation sector has been under strain since the 2020 European Union ban on PIA flights following a pilot licensing scandal, while the Civil Aviation Authority has struggled with safety oversight and revenue shortfalls.
The transfer of airport operations is part of a broader strategy to privatise or outsource major state-owned enterprises. These include Pakistan International Airlines (PIA) and power distribution companies, in line with commitments made to the International Monetary Fund (IMF) under its $7 billion bailout programme.
As mentioned earlier, the Pakistani government is also exploring similar arrangements for Karachi Jinnah International Airport, (KHI/OPKC) and Lahore Allama Iqbal International Airport, (LHE/OPLA).
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