Amraiz Khan Lahore
Transparency International Pakistan Chapter has written a letter to Director General, Civil Aviation Authority warning him against the violation of Public Private Partnership Act while engaging International Finance Corporation in the outsourcing of Operation and land assets at three major airports of the country. In its letter No- TIP 2023/0418/1A dated April 18, 2023 the watchdog said,
The appointment of IFC as an advisor on unsolicited basis and without open competition is a violation of the Public Private Partnership Authority Act 2017, 2022 (amendment) and Regulations 2023 and can potentially cause loss to the national exchequer. The letter further said, “The IFC will get $6 million as success fee on completion of outsourcing of three airports, $2 million fragmented against each airport”.
Interestingly in 2022, Pakistani airports generated about Rs. 90 billion, while over the next 30 years, the airports had a potential of generating more than Rs. 2,700 bn and yet the outsourcing is taking place at Rs850bn. The complainant alleged that on March 30, 2023, the federal government kicked off the outsourcing of operations and land assets at three major airports including Karachi, Lahore and Islamabad to be run through a public-private partnership with a foreign country to generate foreign exchange reserves. The government has engaged the World Bank’s private-sector financing arm, International Finance Corporation, as an advisor for the outsourcing process against the principles of Transparency, and PPP Act 2017.
Transparency International Pakistan has reviewed the allegations of the complainant, prima facie, the allegations seem to be correct. On 29th March 2017, the federal government enacted The Public Private Partnership Authority Act, 2017. Chapter III, clause (d) requires the implementing agency to follow competition bidding process, as quoted below: Chapter III: Functions of the Implementing Agency and Government Support (d) – “procure a project only through a competitive bidding process as prescribed”.
However on 1st September 2022, the National Assembly Secretariat vide No.F.22(62)/2021-Legis.- enacted Public Private Partnership Authority (Amendment) Act, 2022.
In the said Act, after section 30, sections 31 and 32 were added, Section 31 is quoted below:
Clause 31: Hiring of consultants and experts.-Notwithstanding anything contained in the Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002), any rules and regulations made thereunder or any similar laws, the Board may, by regulations, prescribe the manner, method and procedures for the hiring of transaction advisers by implementing agencies in connection with public private partnership projects or certain classes thereof, and such prescribed conditions. once notified, shall govern the hiring of consultants by implementing agencies for providing such transaction advisory services to the extent prescribed therein, including with respect to the direct contracting of international financial institutions as transaction advisers for certain public private partnership projects or classes of public private partnership projects, to the extent and on such terms and conditions as prescribed therein. On 6th January 2023, the federal government’s vide S.R.O. 04 (I)/2023 notified The Public Private Partnership Authority (Direct Contracting of IFIs as Transaction Advisers) Regulations, 2023.