The Ministry of Road Transport & Highways (MoRTH) has emerged as a frontrunner in implementing the National Monetization Policy (NMP), successfully unlocking value from its assets to complement public resources and fuel India’s infrastructure growth. This initiative holds immense potential for boosting the country’s economy and enhancing its road transportation network.
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Unlocking Value through Monetization
The NMP, launched in 2021, had aimed to raise Rs 6 lakh crore over four years by monetizing brownfield infrastructure assets across various sectors. MoRTH has been at the forefront of this endeavor, adopting innovative approaches to monetize its operational highway projects.
Some key strategies include:
Toll Operate Transfer (TOT): Transferring the rights to collect tolls on operational highways to private entities for a predetermined period.
Infrastructure Investment Trusts (InvITs): Pooling highway projects into InvITs and listing them on the stock exchange to attract investments.
Concessionaire models: Awarding contracts to private companies for the development and operation of highways, with revenue generation through tolls or other user fees.
Early Success Stories
Progress so far: Delivery on 2021-22 budget promises
Let’s find out if the Ministry of Road Transport & Highways has delivered on its budget promises made in 2021-22.
– Innovative financing strategies, such as Toll Operate Transfer (TOT), Infrastructure Investment Trust (InvIT), and project-based financing, have generated a total of Rs 73,126 crore by November 2023.
– Monetizing 1,615 km through Toll Operate Transfer has contributed Rs 26,365 crore to the funding pool.
– Infrastructure Investment Trust (InvIT) has raised Rs 10,200 crore by monetizing 635 km of assets.
– Project-based financing for the Delhi-Mumbai Expressway has successfully raised Rs 36,561 crore.
– An additional Rs 15,968 crore realized through Toll Operate Transfer (TOT) during the fiscal year 2023-24.
As you can see, these monetization efforts have already yielded significant results. The funds are also being used to finance new highway construction projects, maintaining and upgrading existing infrastructure and attracting private sector investment as well.
The Road Ahead
While the initial success of MoRTH’s monetization efforts is commendable, there are certain things that the Ministry of Road Transport and Highways needs to keep ensuring. For example, transparency and accountability in the bidding and awarding process is crucial in maintaining public trust. Additionally, striking a balance between attracting private investment and protecting public interests is essential.
There is no doubt that the MoRTH’s proactive approach to asset monetization under the NMP sets a positive precedent for other ministries and paves the way for a more robust and sustainable infrastructure sector in India. By unlocking the potential of its existing assets, MoRTH is not only addressing the country’s infrastructure needs but also creating a new model for financing future growth.
The Ministry of Road Transport & Highways‘ success in monetizing assets through the National Monetization Policy is a significant step towards achieving India’s infrastructure goals. As MoRTH continues to leverage this innovative approach, India’s road and highway landscape is poised for a transformative journey.