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National Monetisation Pipeline: Road Assets Worth Rs 1.60 Lakh Cr To Be Monetised Over 4 Yrs

Highways which will become operational over the NMP period have also been considered as part of the monetisable asset base once these assets see a seasoning in their performance, that is completion of one-two years of operations post establishment of base traffic.

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Road assets worth Rs 1.60 lakh crore will be monetised over four years till FY25 under the ambitious national asset monetisation plan announced by Finance Minister Nirmala Sitharaman on Monday.

Sitharaman said the asset monetisation does not involve selling of land and it is about monetising brownfield assets. 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.

According to the National Monetisation Pipeline (NMP) document released by Sitharaman, the road assets considered for monetisation during FY 2022 to FY 2025 aggregate to 26,700 km. 'This is based on the length of already/ to-be operational, four lane highways and above in the country, entailing potential for revenue generation and thereby monetisation,' it said.

Highways which will become operational over the NMP period have also been considered as part of the monetisable asset base once these assets see a seasoning in their performance, that is completion of one-two years of operations post establishment of base traffic. It pointed out that based on past trend in pace of award and construction, it is estimated that NHAI every year is incrementally adding minimum of 2,000 - 3,000 km of monetisable toll roads to its asset base every year. 'The total length of highway assets considered for monetisation (26,700 km) constitutes around 22 per cent of the total NHs (estimated to be about 1,21,155 km) excluding the network operated by private sector under BOT (Toll) based PPP concession,' it said.

According to the document, the NHAI InvIT issue is envisaged to be privately placed and indicative value of the fund raise from the current tranche underway is about Rs 5,000 crore. 'The fund-raise and issue listing is expected to be completed during FY 22 subject to market conditions and stabilisation of toll revenues in wake of COVID-19,' it said.

The first tranche of InvIT is expected to consist of 586 km of NH assets in Rajasthan, Gujarat, West Bengal, and Bihar. A second tranche of follow on issue of the InvIT is also being explored by NHAI, it added. 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 were 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.

Sitharaman on Monday announced a Rs 6 lakh crore National Monetisation Pipeline (NMP) that will look to unlock value in infrastructure assets across sectors ranging from power to road and railways.

The 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.

(PTI)