Cabinet Forms Committee to Review Revised Airport Outsourcing Bidding Procedure
ISLAMABAD:
The federal cabinet has deferred its decision on the revised bidding procedure for outsourcing Islamabad International Airport under the public-private partnership (PPP) model. In light of concerns and the need for further examination, a specialized committee has been formed to scrutinize the proposed changes and provide recommendations.
The newly constituted committee is tasked with a thorough review of the revised bidding procedure outlined by the Aviation Division. This involves assessing the legal framework as it pertains to the Public Private Partnership Authority (P3A) and the Public Procurement Regulatory Authority (PPRA) rules. The committee will then compile a detailed report to present to the cabinet for further consideration.
During a recent cabinet meeting, it was noted that additional deliberation was necessary before proceeding with the proposed changes. Consequently, the committee has been established under Rule 17(3) of the Rules of Business, 1973. Meetings of the committee will be convened by the deputy prime minister, reflecting the significance of the review process.
The Aviation Division had previously proposed a revised bidding procedure during a steering committee meeting held on June 13, 2024. The proposal included a second round of financial bidding aimed at maximizing the concession value, reducing the need for re-bidding cycles, and ensuring that the process reached its final stages efficiently. This approach, known as the “Best and Final Offer” (BAFO) concept, has been broadly adopted to enhance fairness, transparency, and adherence to competitive procurement principles.
The Aviation Division acknowledged that while the proposed second round of financial bidding was not explicitly covered under PPRA rules, it was justified under the BAFO framework. The intention was to uphold the integrity and competitive nature of the procurement process.
Further discussions revealed that the steering committee had approved amendments to specific clauses (9.1.2 and 9.1.3) of the Request for Proposals (RFP). However, these amendments were subject to final approval by the cabinet. The PPRA board had, on June 26, 2024, referred the matter to P3A due to jurisdictional concerns. The P3A board, after its meeting on July 5, 2024, endorsed the proposal but advised the Aviation Division to seek cabinet approval through the Special Investment Facilitation Council (SIFC).
The SIFC subsequently endorsed the proposal for the second round of bidding on July 10, 2024, and recommended that the cabinet approve the revised procedure.
The move to outsource operations and management of Pakistan’s airports was initially decided in December 2022 during a meeting chaired by the prime minister. This decision was based on the Public Private Partnership Authority Act, 2017. Islamabad, Karachi, and Lahore airports were selected for outsourcing in the first phase of this initiative. The International Finance Corporation (IFC) was appointed as the transaction adviser to facilitate the process.
The cabinet’s decision to defer the bidding procedure underscores the complexities involved in outsourcing major national assets and the need for comprehensive review and approval processes. The formation of the committee aims to address all legal, procedural, and practical considerations to ensure a transparent and effective bidding process.