Power, roads, rly stations, airports, telecom, coal mines, stadiums, among the plan
Finance Minister Nirmala Sitharaman on Monday announced an ambitious Rs 6 lakh crore National Monetisation Pipeline (NMP) aimed at unlocking value in infrastructure assets across sectors ranging from power to road and railways as well as Jawaharlal Nehru stadium in New Delhi.
The Finance Minister had announced the monetisation plan in her annual Budget speech in February.
Sitharaman said the asset monetisation did not involve selling of land and it is about monetising brownfield assets. Projects have been identified across sectors, with roads, railways and power being the top segments.
“NMP estimates aggregate monetisation potential of Rs 6 lakh crore through core assets of Central Government over the four-year period from FY 2022 to FY 2025,” she said. “Ownership of assets will remain with the Government and there will be a mandatory hand-back.”
Asset monetisation will unlock resources and lead to value unlocking, she said.
Union Budget 2021-22 had identified monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing. Towards this, the Budget provided for preparation of a “National Monetisation Pipeline” of potential brownfield infrastructure assets. NITI Aayog in consultation with infra line ministries has prepared the report on NMP.
The aggregate asset pipeline under NMP over the four-year period is indicatively valued at Rs 6 lakh crore. The estimated value corresponds to 14 per cent of the proposed outlay for Centre under the National Infrastructure Pipeline (Rs 43 lakh crore).
The end objective of this initiative is to enable “infrastructure creation through monetisation” wherein the public and private sector collaborate, each excelling in their core areas of competence, so as to deliver socio-economic growth and quality of life to the country’s citizens, she added.
In the railways sector, as many as 400 railway stations, 90 passenger trains, 741-km Konkan Railways and 15 railway stadiums and colonies are planned to be monetised for an estimated Rs 1.2 lakh crore.
Monetising 28,608 circuit kilometres of power transmission lines is estimated to generate Rs 45,200 crore and another Rs 39,832 crore will come from 6 GW of power generation assets.
The telecom sector will give Rs 35,100 crore from monetising 2.86 lakh km of BharatNet fiber and 14,917 signal towers of BSNL and MTNL.
Close to Rs 29,000 crore each is estimated from monetising warehouses and coal mines.
Monetising 8,154 kms of natural gas pipelines is estimated to give Rs 24,462 crore and 3,930-km product pipelines another Rs 22,504 crore. Airport monetisation will fetch Rs 20,782 crore and ports another Rs 12,828 crore. Monetising two national stadiums, including the Jawaharlal Nehru Stadium in New Delhi, and an equal number of regional centres (at Bengaluru and Zirakpur) is estimated to yield Rs 11,450 crore.
Redevelopment of seven residential colonies in Delhi, including ones at Sarojini Nagar and Nauroji Nagaras well as development of residential/ commercial units on 240 acres of land in Ghitorni in Delhi has also been identified to garner Rs 15,000 crore.
The Minister said shipping assets worth Rs 12,828 crore will be monetised over the next four years. The shipping assets monetisation pipeline projects will be implemented by Ministry of Ports, Shipping and Waterways and potential models would be public private partnership (PPP).
Similarly, road assets worth Rs 1.60 lakh crore will be monetised over four years till FY25. The road assets monetisation will be implemented by the Road Transport and Highways Ministry and the National Highways Authority of India (NHAI).
Niti Aayog CEO Amitabh Kant said the potential models of road assets monetisation would be Toll Operate Transfer (ToT) and InvIT.
ToT is one of the key models for monetisation successfully employed in the roads sector both by Central and state entities.
The Ministry of Road Transport and Highways (MoRTH) introduced the TOT concession framework in 2016 for monetisation of road assets portfolio by NHAI to long-term investors. The TOT model primarily entails securitisation of the toll receivables by collecting an upfront concession fee from the selected bidder and determined through a transparent competitive bidding mechanism.
Infrastructure Investment Trust (InvIT) is an innovative trust-based financial instrument, which enables participation in infrastructure financing through a stable and liquid instrument.
InvITs provide an opportunity to invest in infrastructure assets with predictable cash flows and dividends. InvITs have been introduced in India in 2014 and are employed by infrastructure asset owners to pool in money from a diverse set of investors against pay-out of cash flow generated by the assets on a periodic basis.