Raising funds via Sukuks, INPC: NHA Board approves NOC to Finance Division

ISLAMABAD: The National Highways Authority (NHA) Executive Board has approved the issuance of a No-Objection Certificate (NOC) to the Finance Division for raising funds by issuing domestic/international Sukuks and Islamic Naya Pakistan Certificates (INPC) using the unencumbered assets of the NHA.

Official sources revealed that the NOC was issued to the Finance Division against 62,480 kanals assets of the NHA for issuance of domestic and international Sukuk and INPC.

The Board meeting was chaired by Captain (retired) Muhammad Khurram Agha, chairman, NHA where the decision was taken.

The unencumbered assets of the NHA against which domestic/international Sukuks and INPC would be issued by the Finance Division include; 27,905 Kanal and 18 marla in Ormara district and 17,042 Kanal and 10 marla in Gwadar and Jiwani district of Makran Coastal Highway (N-10), 6,172 Kanal and 15 marla of Grand Trunk Road (N-5) in Peshawar and Nowshera districts, 11,361 Kanal and 11 marla of Indus Highway project (N-55) in Peshawar, Kohat, Karak, Bannu, Lakki Marwat and DI Khan districts and 12,604 Kanal and four marla in Peshawar, Kohat, Karak, Lakki Marwat, Bannu and DI Khan districts.

According to the budget documents for the fiscal year 2022-23, the government of Pakistan Ijara Sukuk bonds are issued through Pakistan Domestic Sukuk Company Limited. The Sukuk are not redeemable before maturity. The profit on the Sukuk is payable bi-annually on a rental rate to be announced by the State Bank of Pakistan. Against the budget estimates of Rs1,200 billion for the year 2021-22, the revised estimates were projected at Rs1,725 billion. The budget estimates for the year 2022-23 are estimated at Rs1,200 billion.

The government has also budgeted Rs372 billion from Euro bond/international Sukuk for 2022-23 against Rs560 billion budgeted for the last fiscal year which was revised to Rs342.544 billion.

The Board also referred several issues to Audit Committee of National Highways Authority Executive Board (NHEB) to pursue the case/problems faced by the NHA with the Finance Division and the Federal Board of Revenue (FBR). These issues include a. NHA is facing tax problems with FBR against the transaction performed by federal government in the form of Sukuk Bonds, which is unfair. b. Sukuk bonds issued earlier through NOC granted by NHA are now matured but not released yet. The matter to be taken up with Finance Division. c. A summary for extension up to September 30, 2022, has already been submitted to Finance Division for forwarding Business Plan to the Economic Coordination Committee (ECC) of the Cabinet. The matter be expedited.

The Board also deliberated on construction of balance works of package-III Gwadar-Ratodero Road M-8. The Executive Board allowed inviting state-owned entities under Rule 42 (f) of PPRA to submit bids for Construction of Gwadar Ratodero Road (M-8) at risk and cost of previous contractor M/s Nazir-AM (JV) due to flood emergency in Balochistan.

Copyright Business Recorder, 2022