As monetisation proceeds play a significant role in raising funds for capital expenditure, a parliamentary panel has suggested that the Ministry of Road Transport and Highways (MoRTH) explore the creation of a Monetisation Reserve Fund.
The fund can host proceeds from monetisation that are in excess of annual targets, providing a buffer in years where market sentiment is less conducive, the Department Related Standing Committee on Transport, Tourism and Culture said in its report.
Linking core capital expenditure to market-dependent instruments introduces an element of funding volatility, which the fund can address, the committee said, providing rationale for the fund. In the next financial year, the total investment by National Highways Authority of India (NHAI) is projected at Rs 1.87 lakh crore, of which 16%, or Rs 30,000 crore, is expected to come from asset monetisation.
Hedging Against Volatility
The Government Budgetary Support (GBS) for NHAI in FY27 is Rs 1.22 lakh crore, while toll remittance ploughback has been pegged at Rs. 35,027 crore.
Scaling for NMP 2.0
The Monetisation Reserve Fund could also be replicated in other sectors as the work on the second National Monetisation Pipeline (NMP) gets underway. The NMP 2.0 has a target of Rs 16.72 lakh crore from asset monetisation and private investment, which is much higher than Rs 5.3 lakh crore raised by the first NMP.
For the highways sector, the NMP 2.0 has a target of Rs 4.42 lakh crore from 2025-26 to 2029-30. So far this financial year, NHAI has raised Rs 12,357 crore from two rounds of monetisation through the Toll Operate Transfer (ToT) mode. Another Rs 9,500 crore will come from acquisition of road assets by Raajmarg Infra Investment Trust from NHAI. The NHAI will raise another Rs 6,220 crore from monetisation through National Highways Infra Trust (NHIT).
These transactions, which will be completed in coming days, will help NHAI raise Rs 28,077 from monetisation this fiscal, which will be at the 2024-25 level when Rs 28,724 crore were raised. Similar to last financial year, this year too there is no asset-backed securitisation — which is another form of monetisation undertaken to partly finance Delhi Mumbai Expressway (DME).
No new projects have been identified for securitisation so far. However, for DME, this route has brought in Rs 46,532 crore.