Request for Proposals for Outsourcing Operations & Management of Islamabad Airport

[Abbas Ali]

Lone Bidder Offers Lower Than Acceptable Price for Outsourcing Operations & Management of Islamabad Airport



Financial proposal opened today at Pakistan Airports Authority (PAA) Headquarters in Karachi for outsourcing operations & management of Islamabad Airport.

56% is fixed as the minimum acceptable price/percentage for PAA transaction fee percentage.

The lone bidder, a consortium led by TERG from Turkiye and including Terminal Yapi (https://www.terminalyapi.com.tr/), ERG Insaat (https://erg-insaat.com.tr/) and ERG UK (https://www.erg-int.co.uk/) offered 47.25%. The submitted financial proposal details will be presented to the transaction advisor International Finance Corporation (IFC) for further evaluation and submission of final report to PAA January 9, 2025.

The bid offered by the lone bidder is lower than the acceptable price.

The final decision will be made following review by PAA Board meeting and federal cabinet decision.

Abbas

[Abbas Ali]

Completion of process for outsourcing operations and management of Islamabad Airport expected in next few days, said Prime Minister Shehbaz Sharif at an event in Karachi today. The process is 100% transparent, he informed.

Abbas

[Abbas Ali]

Financial proposal submitted by lone bidder, a consortium led by TERG from Turkiye, for outsourcing operations & management of Islamabad Airport has been rejected by the federal cabinet.

56% share of gross revenue was fixed as the minimum acceptable price/Minimum Revenue Guarantee (MRG). The bidder had offered offered 47.25% share.

Pakistan Airport Authority (PAA) board meeting had recommended to the federal cabinet to reject consortium’s offer. Gross revenue of Islamabad International Airport is estimated at PKR 34 billion per year.

Process to outsource Islamabad International Airport operations & management to be restarted in next few months.

Abbas

[Karachi Aviator]

Financial proposal submitted by lone bidder, a consortium led by TERG from Turkiye, for outsourcing operations & management of Islamabad Airport has been rejected by the federal cabinet.

56% share of gross revenue was fixed as the minimum acceptable price/Minimum Revenue Guarantee (MRG). The bidder had offered offered 47.25% share.

Pakistan Airport Authority (PAA) board meeting had recommended to the federal cabinet to reject consortium’s offer. Gross revenue of Islamabad International Airport is estimated at PKR 34 billion per year.

Process to outsource Islamabad International Airport operations & management to be restarted in next few months.

Abbas

56% of the gross revenue (19 billion) is nothing, that too for ISB which only opened in 2018. If that's the criteria for the minimum acceptable price, than KHI will be worth more than ISB? assuming KHI earns more revenue. But then ISB is a newer and a larger airport and better than KHI in terms of pretty much everything. Weird evaluation practice or am I missing something here.