The Asian Development Bank has formally taken on the role of financial and transaction adviser for Pakistan's plan to outsource operations at Islamabad International Airport, marking a notable shift in how the country approaches privatization. This collaboration represents the first time a multilateral organization will directly assist a privatization transaction in Pakistan. Main Developments Privatisation Commission Director General Shahid Dayo and ADB Country Director Emma Fan signed the transaction advisory services agreement (TASA) in Islamabad on Wednesday. Senior officials including Adviser to the Prime Minister on Privatisation Muhammad Ali witnessed the ceremony. Under the agreement, the ADB will provide comprehensive advisory services covering technical, financial, legal, environmental and commercial aspects. The goal is to structure the transaction according to international best practices and attract leading airport operators and investors through a transparent, competitive process. Read also: Uzbek Deputy PM to Visit Pakistan for Trade, Sign 5-Year Plan The Privatisation Commission stated that the advisory services are designed to facilitate a market-driven process. A senior commission official told a Senate panel that the outsourcing process should be completed within nine months, with the due diligence phase concluding in three months. Background Pakistan's government made privatization a key priority in June 2024, directing that Islamabad International Airport be outsourced first. The airport will be handed to a qualified private sector operator under a long-term concession framework through competitive bidding. In February, the board formed a negotiation committee to engage with the ADB and discuss terms for a financial advisory services agreement. The final contract included specific modifications, particularly indemnity protections to shield the ADB from litigation due to its status as a multilateral agency. The Cabinet Committee on Privatisation approved the negotiated terms proposed by the Privatisation Commission. This marks a departure from earlier government-to-government discussions for Karachi and Lahore airports, which had not progressed as expected. Why It Matters The involvement of a multilateral lender like the ADB brings credibility and expertise to Pakistan's privatization process, potentially increasing investor confidence. The government expects the outsourcing to improve operational efficiency, enhance passenger experience, and align airport services with international standards. For Karachi and Lahore airports, the government plans to appoint a single financial advisor, with preparatory work already underway. Privatisation Adviser Muhammad Ali told Dawn that both airports are expected to attract more than $500 million each in fresh investment. The board also approved the appointment of chartered accountancy firm BDO Ebrahim and Company as external auditors for three financial years from 2025-26 to 2027-28. This move aims to strengthen transparency and investor confidence in the broader privatization program. What's Next The due diligence phase for Islamabad airport is expected to conclude within three months, with the full outsourcing process targeted for completion within nine months. The government aims to finalize the privatization during the current fiscal year. The process for hiring financial advisers for Karachi and Lahore international airports will begin immediately, following the stalled government-to-government discussions. These separate transactions will proceed under a different structure, with a single financial advisor overseeing both airports.