National Asset Monetisation Pipeline: Modi Govt Finalising Plan To Monetise Rs 6 Trillion Worth Infrastructure Assets

The union government is finalising a plan to monetise Rs 6 trillion (Rs 6 lakh crore) of infrastructure assets including pipelines of state-run electricity transmission utility Power Grid Corporation of India (PGCIL) and national highways, among others, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said.

“A national monetisation plan of about Rs 6 trillion is in the offing which will have a range of assets from pipelines to power grid pipelines to national highways, ToT and so on,” Pandey said while addressing the CII annual session.

The Infrastructure Investment Trust (InvIT) of Power Grid Corporation of India (PGCIL) was successfully done which has led to putting regulatory systems in place. This entailed streamlining a host of regulations and procedures. The second InvIT by GAIL is expected soon, which is also in the pipeline, Pandey said at the annual session of industry body CII.

In May this year, PowerGrid InvIT sponsored by the PGCLIL debuted at Rs 104 per unit on BSE, a premium of 4 per cent over its issue size of Rs 100 per unit.

Tenders for public private partnerships (PPP) in railway stations have also been announced, and the model has been successful in managing airports.

“There is a big asset monetisation pipeline where private sector participation is anticipated,” Pandey said.

Finance Minister Nirmala Sitharaman, in her 2021-22 Budget speech, had said monetising operating public infrastructure assets was a very important financing to fund creation new infrastructure.

Niti Aayog has already developed a national monetisation pipeline (NMP) on the lines of National Infrastructure Pipeline (NIP) which seeks to invite private sector participation in the infrastructure sector. The monetisation pipeline has been created for a four-year period from financial year 2021-22 to 2024-25.

Pandey also said that government is on course to complete major disinvestments this year including Air India, Bharat Petroleum Corporation (BPCL), Shipping Corporation of India (SCI), BEML, Pawan Hans and Neelachal Ispat Nigam (NINL). He said that the government has received sufficient interest from bidders.

“We intend to do Air India this year, BPCL privatization we want to complete this year. Shipping Corp, BEML, Pawan Hans and NINL, these are the transactions where we have substantial interest from bidders and we are now completing that second stage of due diligence and bidding, which we hope to complete this FY,” he said.

Pandey also said that the initial public offering of LIC, which could be the largest market debut in India, will also be done this year.

Pandey also said that expression of interest for Container Corp will be floated very soon.

Pandey also acknowledged that the Covid-19 pandemic was a setback to union government’s privatization plans last fiscal and in the first quarter of this fiscal year, but now things were getting back on track.

“Covid had hit us badly. The due diligence is very rigorous when it comes to strategic sales, and that process was impacted because of travel restrictions,” he added.

“We have come out with a clear policy for public sector enterprises, wherein we have four broad strategic sectors where the bare minimum number of PSEs will be retained, and the others will either be privatized or consolidated or they will be closed,” Pandey said.