ISLAMABAD: Pakistan’s cabinet committee has approved a move to finalize arrangements with the United Arab Emirates (UAE) for the transfer of operations of Islamabad International Airport, Deputy Prime Minister Ishaq Dar said on Thursday.

The agreement, to be concluded under a government-to-government (G2G) model, comes as Pakistan seeks to privatize or outsource management of several state-run enterprises under conditions agreed with the International Monetary Fund (IMF) as part of a $7 billion bailout approved in September last year. 

The national flag carrier, Pakistan International Airlines (PIA), and state-owned electricity generation and distribution companies, are already on the government’s privatization list, while authorities have been looking for international partners to modernize airports and improve services.

Officials hope foreign partners will bring operational expertise, enhance passenger experience, and restore confidence in the aviation sector.

“Today [Aug. 28] we decided to finalize arrangements with the UAE government through a G2G framework agreement for the transfer of operations of Islamabad International Airport,” Deputy Prime Minister and Foreign Minister Ishaq Dar said in a statement after chairing a meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions.

The Negotiation Committee formed to work out details will be headed by the prime minister’s adviser on privatization and will include representatives from the ministries of defense, finance, law and justice, and privatization, according to the statement.

Islamabad International Airport, inaugurated in 2018 at a cost of over $1 billion, has faced criticism over construction delays, poor facilities, and operational inefficiencies. The airport was built to replace the old Benazir Bhutto International Airport, which had been overwhelmed by passenger traffic.

The handover is part of a broader government drive to secure foreign investment in critical infrastructure. Earlier this year, the government said it was considering offering management contracts for airports in Karachi and Lahore as well, though no final arrangements have been announced.

Pakistan’s aviation sector has been under strain since the 2020 European Union ban on PIA flights following a pilot licensing scandal, while the Civil Aviation Authority has struggled with safety oversight and revenue shortfalls. 

The EU ban has since been lifted.