Islamabad airport goes to the UAE? Just the duty-free and lattes, not security

Imagine your visa to Dubai is suddenly rejected for security reasons, even though you have been going for years. It turns out that you used the Islamabad International Airport’s new wifi and clicked on a BBC story critical of Gulf migrant labour policies. This happened after Pakistan asked the UAE to bring in a firm to handle operations.

This is the fear that got me wondering about the possibility of something like this happening. I heard the news that Deputy Prime Minister Ishaq Dar has made a government-to-government agreement to transfer Islamabad airport’s operational management with the UAE. “This partnership will help transform Islamabad airport into a facility that matches global service and operational standards,” Dar said.

The ministries of Finance, Defence, Law and Justice and Privatisation will prepare the agreement for the Civil Aviation Authority, according to government and aviation officials privy to the matter. This is part of a push to attract investment in the sector.

Islamabad’s airport may be Pakistan’s largest, newest and shiniest but it is struggling with inefficiencies. One reason was the decision to split the CAA and carve out a Pakistan Airport Authority in 2023. The idea was that the PAA would manage the airport’s business, Tahir Imran Mian told me.

“It is illogical for a regulator to also provide services on the ground,” he said. “The [US regulator] FAA isn’t busy running a Starbucks. Why should the CAA?” Outsourcing the airport’s management will remedy these operational problems and allow the airport to turn a profit, he argued.

I figured there must be a reason for such an assumption. Some quick research indicated that the idea is not new. And while I would have liked to have an exact example to share, I do have something close.

Sialkot airport, it turns out, follows this model. Kind of. The CAA oversees it but the airport itself is managed by a private company: Sialkot International Airport Limited on a Build-Own-Operate basis. This is not the same as outsourcing but supporters say it proves that private ownership and management can work. In 2021, SIAL reported an after-tax profit of Rs224 million. The next year, it went up sixfold to Rs1.381 billion.

Running an airport

If you’ve been to Dubai airport, you’ve probably seen its fancy duty-free options: Paul’s Cafe at Terminal 3, Swarovski, Kiehl’s, spa, sleep pods, Burberry, and Dyson. Running these business outlets and hotels comes under operational management, journalist Tahir Imran Mian explained.

Airports thus make money from duty-free shops, airlines, outlet rentals, parking spaces, air bridges, fuel facilities that companies pay to use, and ground handling companies.

This side of work has nothing to do with air traffic control, immigration, customs, communication systems, or security.

I was able to get in touch with a former CAA Chief Operating Officer, Obaidur Rehman Abbasi, who also confirmed that these operations would remain solely in Pakistani hands. Your passport information (personal data) is managed by the Federal Investigation Agency, and airlines only have access to passenger data. Third parties cannot gain access to this information, he added.

People on X and Facebook have taken this operational takeover to mean Pakistan is giving control of Islamabad airport to a foreign government, allowing it to tinker with its technological infrastructure.

This user speculated that the UAE could replace the systems used for managing air traffic and messaging. It claimed that this would mean the UAE could switch the Islamabad airport from its German COMSOFT systems installed by the CAA in 2009 to the ICTS International system, which has been used by Israel’s Shin Bet intelligence and security personnel since 1982.

I mentioned this to Tahir Imran and a senior aviation official, who did not want to be named as he was not authorised to speak to the media. Both of them said that no foreign entity can install its own security systems or record passenger data, as that does not fall under the authority of airport management. Only the regulatory body or FIA and the airlines can do this.

What about the money?

Islamabad airport generated around Rs15 billion on average per year over the last three years, according to this report. Former COO Obaidur Rehman Abbasi told me that in March this year, it collected Rs72.3 million in cargo throughput charges alone.

This gave me an idea of how much money we were talking about. The government would naturally want to maximise on any agreement. Obaidur Rehman Abbasi told me that earlier public-private-partnership bids, such as the one from a Turkish consortium, did not meet the government’s revenue expectations. They offered a concession fee of about 47% of airport revenue to the government, which was more keen on 56%, “hence the [current] support for a G2G deal”.

Another earlier proposal for a public-private partnership said the successful operator (bidder) would pay the CAA an upfront fee of $100 million. These agreements would last for 15 years. One presentation projected that the CAA’s share in revenues plus concession revenue would amount to $1.36 billion over 15 years.

If a company takes on the work, it will also be responsible for the wages and pensions of the airport employees. Abbasi did say that the CAA and unions have “demanded written assurances about job security,” so there will likely be contractual restrictions to prevent the operator from replacing all local employees, or at least rules set about how many can be replaced. Functions that remain with the CAA, like the ATC system or runway management, will likely retain their employees as well, he added.

What we also know about the UAE deal is that any operator would have to spend money on “improving / modernising / upgrading” the airport (e.g. terminal, landside, cargo terminal, parking, commercial retail/shops). And if you’ve been stuck at Islamabad airport and wanted a decent cup of tea, that certainly seems like a welcome proposition.

Regardless, I will be following this story and will report back on any developments.

With additional reporting by Waqas Ahmed.

Daniyal Khuhro is a subeditor at The Express Tribune and can be reached at daniyal.khuhro@tribune.com.pk