ISLAMABAD: The government on Thursday kicked off outsourcing of operations and land assets at three major airports to be run through a public-private partnership, a finance ministry statement said, a move to generate foreign exchange reserves.

The Economic Coordination Committee (ECC) has approved the hiring of the International Finance Corporation (IFC) — the private sector arm of the World Bank Group — as a transaction adviser to outsource Karachi, Lahore and Islamabad airports to the private sector for at least 25 years.

The committee’s meeting, presided over by Finance Minister Ishaq Dar, deferred a summary submitted by the power division on implementing an agreement signed between the government and K-Electric on the pending issue of payment of duties and taxes. It also approved a series of supplementary grants, mostly for political schemes, under the Sustainable Development Goals (SDGs).

“The outsourcing of three airports has been initiated within the scope of public-private partnership … 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,” the ministry said.

Officials said there had been a difference of opinion among cabinet members over the appointment of IFC for outsourcing airports that whether this should go through the privatisation process under the privatisation law or through the public-private partnership law.

The federal cabinet decided in December that outsourcing the operation of these three airports would be completed expeditiously by engaging leading international financial institutions under the Public-Private Partnership Authority (P3A) Act.

The act provides for hiring an international financial institution as a transaction adviser through direct contracting with the approval of the P3A’s board.

The Civil Aviation Authority (CAA) contacted many institutions but only the World Bank’s IFC agreed to advisory service and finally reached an agreement for a transaction adviser early this month for a fee of about $4 million.