MEGA MONETISATION DRIVE

The redevelopment of Indian Railways’ stations as well as airports are among the lowest hanging fruits in the ambitious National Monetisation Pipeline provided it’s executed well — that is, attracting wellmeaning private investors

- Ashish Sinha

THE MONETISATION OF ASSETS of Indian Railways (IR) and roads together account for 53 per cent of the total asset monetization pipeline of Rs 6 lakh crore over FY22-FY25 envisaged under the ambitious National Monetisation Pipeline (NMP) announced by Nirmala Sitharaman, the Union Minister for Finance and Corporate Affairs. In actual money terms, the monetization of assets across roads, Railways, and the aviation sectors is pegged to generate Rs 3,33,478 crore for the exchequer over the next four financial years. However, in order to implement this plan, the government has to put forth a clear plan of action that manages to attract financially viable and well-meaning private players who would continue to operate the assets on the long-term lease without any future hiccups.

The monetisation of national highways and expressways (26,700 kms earmarked under NMP) is crucial. The annual monetisation value has been arrived at by multiplying the annual phasing of assets considered for monetisation (in kms) and the multiple (in Rs. crore per km). Since 2017, the National Highways Authority of India (NHAI) has been successfully monetising its brownfield road assets through Toll Operate Transfer (TOT)-based Public-Private-Partnership (PPP) concessions. The TOT model has since matured and is now an established model with a model concession framework already in place. Another method of monetization that has seen traction in the recent past is the InvIT model. A number of road assets have been monetised through InvITs by private sector players.