The Centre is likely to set an ambitious target of Rs 10 trillion for the second phase of the National Monetisation Pipeline (NMP-II) to be implemented in the five years ending FY30. “The assets (to be leased out) in the second phase will be led by highways, mining, power and petroleum, while metro rail networks in major cities will give the impetus to the asset recycling for the first time,” a senior official said.
The first phase of NMP, unveiled in FY22, had set an ambitious Rs 6 trillion asset recycling target for four years through FY25, by monetisation (long-term leasing) of brownfield assets in sectors like roads, mining, power, petroleum and airports. Despite the Railway sector lagging massively, the NMP-1 achievement has been Rs 3.85 trillion or 90% of the Rs 4.3 trillion targeted in the first three years. This was mainly due to the higher-than-expected revenues from the coal and mining sectors, as upfront revenues, as well as via revenue sharing from operations. Even capex from private parties was included as receipts.
For FY25, the terminal year for the first phase of NMP, the target is being enhanced to close to Rs 2 trillion due to a robust pipeline of projects.
For the NMP-2, Metro rail networks developed through public investment will be a major pipeline of brownfield assets, the sources said. Besides operations and management of the Metro networks, built-up space in Metro stations will be up for grabs for leasing under the public-private-partnership mode. Metro networks which could be taken up for monetization include Delhi, Bangalore, Chennai, Jaipur and Kanpur, among others, the source added.
Monetisation of railway is also expected to pick up in the next five years by way of commercial leasing of space in over 100 stations including Mumbai, Delhi, Chennai and Secunderabad among others, the source said.
The railways is already developing over 100 stations under the engineering, procurement and construction (EPC) model. Delhi will also be developed under the same model soon. “After stations are redeveloped, commercial space will be leased out in and around stations,” another source said.
While the power sector would likely focus on securitizing existing revenues streams, the petroleum sectors would boost monetization through private investment in exploration-production ativities.
With India’s oil and gas exploration-production sector requiring about $100 billion in investments by 2030, the government is pushing for more private sector participation for strengthening the domestic production of oil and gas while reducing dependency on imports. So, the award of E&P contracts would yield more fresh investments in the sector.
Coal and other mining and highways which were major contributors to NMP so far would continue to yield substantial amounts in monetisation under NMP-2 as well.
According to Vision for 2047 to become a developed nation, which will likely be unveiled later this month, India’s investment needs to be maintained around 32% of GDP by 2030 from around 31% now, before rising to 34% by 2040 and to around 35% by 2047. India is aiming for a USD 30 trillion economy by 2047 with per capita GDP rising from USD 4,418 in 2030 to USD 10,021 in 2040 and USD 17,590 (trait of a developed nation) in 2047.
Asset monettsaion is estimated to account for 5.4% of the total infrastructure investment envisaged under the Rs 111 trillion National Infrastructure Pipeline (NIP) for FY21-FY25.