Now that almost 10 infrastructure ministries have submitted a fresh list of their core infrastructure assets, the government has realised it stands to make much more money from asset monetisation than previously thought.
Two persons in the government said it stood to garner over 30 per cent more than the earlier estimates of Rs 2.5 trillion over the next four years under the National Monetisation Pipeline (NMP).
The NMP, which is being prepared by Niti Aayog, is in the advanced stages of finalisation and is expected to be unveiled in August.
“The asset pipeline is almost ready and awaiting approvals. It will be in two parts.
"One will have the broader details of the policy and monetisation benefits.
"The other part will have details of the core infrastructure assets which are going to be monetised over the next four years,” said a government source privy to the matter.
The official added: “Also, the asset base available for monetisation is going to get expanded as the new plan comprises a pipeline over a four year window from now.
"The earlier target of fetching Rs 2.5 trillion was based on an initial pipeline of the core assets.”
The NMP is being drawn up in such a way that it offers a sustained pipeline ranging from the medium to the long term which will provide a visibility of transactions to investors and allow asset owners to plan the respective activities.
Sources say that the government is looking to tap institutional investors such as global pension funds and sovereign wealth funds who have been keen to invest in India infrastructure assets.
Data shows that almost $26 billion of ‘dry powder’ or highly liquid capital is available for investing in India.
Accordingly, the NMP is aiming to provide stable infrastructure assets with investible vehicles and structures.
Another official said that Niti Aayog has shortlisted the brownfield infrastructure assets which are going to be monetised on a year-on-year basis, along with an indicative valuation of the pipeline.
Brownfield projects are substantially protected against the risks associated with the gestation or construction period.
Brownfield assets typically entail investments only towards augmentation and expansion as against greenfield projects that create infrastructure from scratch.
The same official also indicated that the shortlisted assets will be sent to the concerned ministries by the end of July with a target and a timeline of each financial year till FY’2025.
“Some key features are that ownership of the project will remain with the government; private investors have to ensure that performance standards of the asset are met; and that assets must be handed back to the government once the transaction period is over,” said the official.
He added that the NMP criteria will be different from that of privatisation.
In the first phase, sources say, the government has lined up plans to monetise assets including roads, electricity transmission, oil and gas pipelines, telecom towers and sports stadia, among others, in the current financial year.
Niti Aayog has asked ministries to identify and share information on the assets to be included in the pipeline.
Several meetings with the Core Group of Secretaries for Asset Monetisation have taken place recently following the finance minister’s announcement during the February Budget about launching the monetisation plan for potential brownfield infrastructure assets.
This is unlike the National Infrastructure Pipeline which is working only on greenfield projects.