Why did the government start considering mortgaging the country's airports and major highways?

Why did the government start considering mortgaging the country's airports and major highways?

ISLAMABAD: The government has sought permission from the federal cabinet to mortgage major airports and highways to meet the budget deficit in the next financial year, but the move will generate a loan of Rs 18 trillion.

Islamabad's Fatima Jinnah Park has been removed from the list of assets that the finance ministry wants to mortgage to international and local lenders. However, according to Finance Ministry sources, three highways (motorways), three international airports, and the Islamabad Expressway have been added to the list.

The finance ministry has appealed to the federal cabinet to support the government's budgetary position and to issue sukook bonds in local and global markets to boost the Islamic banking industry. The federal cabinet will decide on these issues today (Tuesday). A mortgage loan is cheaper than a conventional loan.

The Finance Ministry has requested the Cabinet to identify new assets to ensure continued issuance of monopoly sukook in domestic and foreign markets. Loans obtained through the issuance of sukook bonds and mortgages are cheaper than loans obtained through conventional bonds. The Ministry of Finance has identified M1 Motorway (Islamabad Peshawar) and M3 Motorway (Pindi Bhattian Faisalabad) and Islamabad Expressway as livable assets.

The Finance Ministry has requested the National Highway Authority and the Civil Aviation Authority to issue NOCs for borrowing on the basis of these assets. The CAA has not yet responded, while the NHA has sought compensation for the use of its assets. The finance ministry has asked the federal cabinet to allow any department to mortgage assets without paying compensation.

The Ministry of Finance has estimated the value of Lahore Airport at Rs 980 billion, Islamabad International Airport at Rs 230 billion, and Multan Airport at Rs 320 billion. Similarly, the value of Islamabad Express is estimated at Rs 470 billion.

Finance Ministry sources said that the government has already taken a loan of Rs 700 billion by mortgaging Jinnah International Airport.