The government is readying a national monetisation plan of about Rs 6 lakh crore, which will include a range of assets including pipelines, power transmission lines and national highway stretches, department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey said on Wednesday, without giving any timeline for the completion of the process.
Speaking at a virtual conference of industry body CII, Pandey said with Covid cases subsiding, big ticket disinvestments, including privatisation of retailer-cum-refiner BPCL as well as listing of Life Insurance Corporation (LIC) were on track for completion in FY22.
In May, Power Grid raised Rs 2,736 crore through PowerGrid Infrastructure Investment Trust (PGInvIT). The second InvIT might come from GAIL to monetise its pipelines, Pandey said.
The government has drawn large inventory of core assets of state-owned entities including pipelines of Indian Oil and GAIL, operational sections of Delhi Metro, Indian Railways’ Dedicated Rail Freight Corridor, track, signalling & overhead assets and Kolkata Metro & real estate. Niti Aayog had identified assets such as 12 bundles of highways of 6,000 km by 2024 to raise up to Rs 60,000 crore via the toll operate transfer (TOT) route. Private sector participation is also sought in the running of 150 passenger trains (tendering process on) and redevelopment of 50 railway stations. Power Grid will offer Rs 20,000 crore worth transmission lines in two phases.
Monetisation of assets including land is seen to give a big boost to the government’s non-dent receipts and help consolidate its fiscal position.
Telecom towers of BSNL, MTNL and fibre network of BBNL will be monetised too. Besides core assets of state-run entities, Niti Aayog had also recommended monetisation of special assets such as stadiums and tourism/mountain railways lines.
The Airports Authority of India has completed monetisation of six identified airports (Ahmedabad, Mangalore, Lucknow, Thiruvananthapuram, Jaipur and Guwahati). Similarly, the ministry of shipping is in the process of recycling 11 assets including 10 berths and lnternational Cruise Terminal at Goa Port.
“There is a big asset monetisation pipeline where private sector participation is anticipated,” Pandey told industry representatives.
While the Centre would retain 100% of the proceeds from monetisation of non-core assets of units identified for strategic sale and enemy properties, it could share a large chunk of the proceeds with CPSEs in case operational core assets are monetised.
In the FY22 Budget, finance minister Nirmala Sitharman announced national asset monetisation pipeline (NAMP) of potential brownfield infrastructure assets such as five operational roads with an estimated enterprise value of Rs 5,000 crore are being transferred to the NHAI InvIT. Similarily, transmission assets of a value of Rs 7,000 crore will be transferred to the PGCIL InvIT. Railways will monetise Dedicated Freight Corridor assets for operations and maintenance, after commissioning. The next lot of airports will be monetised for operations and management concession.
On disinvestment, Pandey said with the decline in Covid cases and listing of travel restriction, the government’s Rs 1.75 lakh crore disinvestment programme for FY22 is back on track.
“We intend to do Air India privatisation, BPCL privatisation, Shipping Corp of India, Pawan Hans, BEML and Neelachal Ispat Nigam this year,” he said. These companies got sufficient interest from bidders and are now at the due diligence and financial bidding stage. The mega IPO of LIC is also expected to be completed in the current financial year as well, he added. According to analysts, a 10% stake sale in LIC could fetch the government anything between Rs 80,000-100,000 crore, which is crucial to achieve the disinvestment target for FY22.
Pandey also said that the government plans to sell its residual 19.55% stake in Paradeep Phosphates (PPL) in FY22.