F-9 Park, Islamabad Expressway, Lahore airport identified for launching Sukuk

ISLAMABAD: The federal government has identified F-9 Park Islamabad, Islamabad Expressway and Allama Iqbal International Airport Lahore as a guarantee for launching the Islamic-denominated Ijara Sukuk bond.

In a statement of Sunday, the Finance Ministry said, “The federal government assets such as Islamabad Expressway, Allama Iqbal International Airport and F-9 Park have been identified, in consultation with experts in Islamic finance, as good potential candidates for Sukuk structures.”

In a bid to avoid financial constraints and ensure budget support, the federal government has decided to issue domestic and international Ijara Sukuk against unencumbered land of F-9 Park, Islamabad and the next federal cabinet will take decision in this regard.

According to sources, the federal cabinet scheduled to be held on January 26 will take a final decision on a summary of the Finance Division titled “Issuance of Domestic and International Ijara Sukuk against Unencumbered Land of F-9 Park, Islamabad”. They said the finance division has forwarded the summary to cabinet after the issuance of No Objection Certificate (NoC) from Capital Development Authority (CDA) whereas the meeting will to take up 17 items of agenda besides, any other item with the permission of the chair.

“The government has decided to issue Sukuk for budget support and to avoid financial constraints while the domestic and international Ijara Sukuk bonds will be issued for 750 acres of land of the said F-9 Park of the federal capital,” said sources.

They added that a consortium comprising three banks has been established for issuing domestic and international Ijara Sukuk bonds.

Sharing details of the Cabinet’s agenda, the sources said that the upcoming cabinet meeting will take up summaries of interior, cabinet, climate change, defence, finance, religious affairs & inter-faith harmony, National Health Services, Regulations and Coordination Division.

They said cabinet will take up future administrative structure and placement of National Disaster Risk Management Fund (NDRMF), Pakistan’s full membership of International Network on Bamboo and Rattan (INBAR), reconstitution of committees of cabinet after judgment of honourable Islamabad High Court (IHC) on Advisors and Special Assistant to the Prime Minister, extension in application of Pakistan Essential Services (maintenance) Act  1952 to all classes of employment under National Institutional Facilitation Technologies (NIFT) Pvt., approval of the cabinet to request Election Commission of Pakistan (ECP) for issuance of programme for conduct of  local government election in Cantonment Boards and to fix the dates for filing of nomination papers, security, allotment of symbols and polls, etc., issuance of domestic and international Ijara Sukuk Bonds against unencumbered land of F-9 park, Islamabad, audit of NADRA accounts for the financial year ended 30^th June, 2020, maximum retail price fixation of COVID-19 vaccine and relaxation in the SRO 577 (1) 2016, issuance of NoC for sale of communal property No.90-B, Model Town, Lahore, Worker’s Welfare Fund (WWF) Housing Allotment Policy-2020 and memorandum of Understanding (MoU) between WWF & Naya Pakistan Housing & Development Authority (NAPHDA), ratification of the decisions taken by the Cabinet Committee on Institutional Reforms (CCIR), the ratification of the decisions taken by the Cabinet Committee on Energy (CCoE), and the ratification of the decisions taken by the ECC.

It will be the first time under the Pakistan Tehreek-e-Insaf (PTI) rule when the government is going to launch an international Sukuk bond. The summary of the Finance Division has been forwarded to the Cabinet Division for seeking formal approval.

The government had placed the Jinnah International Airport Karachi and power distribution companies as guarantees for launching domestic Sukuk bonds last year. The government had also kick-started the process for launching Eurobond to fetch another $1 billion. Now the hired advisors recommended the government to launch an international Sukuk bond as well.