Centre likely to miss national monetisation target for next fiscal

The Centre’s ambitious Rs 6-trillion National Monetisation Pipeline (NMP) could fall short of yearly targets for the current fiscal year (FY22) and the next one as well (FY23), partly due to the long gestation period in monetising big-ticket railway infrastructure, Business Standard has learnt from sources in the finance and rail ministries.

Officials say the major chunk of railway monetisation will happen from FY24 onwards because leasing some of the infrastructure, like stadiums and dedicated freight corridor, will not happen anytime soon.

Rail infra is expected to be the second-biggest contributor to the NMP, with about Rs 1.52 trillion worth of assets to be monetised. “The rail ministry has informed us that apart from station redevelopment, most of their monetisation will happen from FY24 onwards. So it is likely that FY23 targets too will be missed,” said a senior government official.

The NMP target for FY22 is Rs 88,190 crore. Since the NMP was rolled out in August, public sector enterprises have realised about Rs 26,800 crore, with another Rs 15,000-16,000 crore to be realised soon by the roads ministry. The target for FY23 is Rs 1.62 trillion.

According to the NMP plan, the railways is expected to monetise around 400 stations. But till December 2021, the national transporter did not send any proposal for the approval of the Public Private Partnership Appraisal Committee (PPPAC). There were also plans to monetise around 250 goods sheds.

A railways spokesperson did not respond to questions from Business Standard. On the other hand, a source said the plans for monetising heritage routes, assets, and stadiums might also take some more time than anticipated.

For FY22, the railways had lined up projects worth around Rs 17,810 crore for monetisation. They included 12 stations but could not make much headway in this regard. Though it had lined up 109 routes to private players to operate trains in July 2020, the project got derailed because it got minimal interest from industry players. If heritage assets are monetised, it will be a big boost for the railways, which spends Rs 250-300 crore per year to maintain those assets.

The NMP aims to unlock value in brownfield projects by engaging private sector participants, transferring to them revenue rights, while their ownership remains with the government. This arrangement would make it similar to public-private partnerships.

Unlike privatisation or stake sales of state-owned companies, the Central government will not get all the funds from asset monetisation, because a large chunk of them will go to public sector units (PSUs) and government agencies that own the assets.

PSUs have been told to prioritise spending the proceeds on capital generation and then transfer whatever is left to the Centre through dividend payment and share buyback. In the case of unlisted PSUs like the National Highways Authority of India (NHAI), Airports Authority of India (AAI), and Bharat Sanchar Nigam (BSNL), the Centre will get the entire share buyback and dividend because it is the 100 per cent owner.