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The government’s core group on asset monetisation has raised concerns over the slow progress made by several ministries in monetising public assets. The railways, tourism, telecom, and petroleum sectors were pulled up for not meeting their targets, according to a report by The Times of India.
The high-level panel led by Cabinet Secretary TV Somanathan, the report mentioned, criticised the railways for its poor performance in monetising stations, passenger trains, and freight terminals. The tourism department was also singled out for the ‘very slow’ progress in the Ashok Hotel transaction.
The telecom department (DoT) faced scrutiny for dropping plans to monetise BSNL’s telecom towers. Officials were told, “It was essential to push the proposal as government funding could not be the sole source of meeting the ailing PSU’s debt obligation.” Furthermore, the petroleum ministry was instructed to revive plans to monetise the gas pipeline network, with a target of Rs 30,000 crore for the next cycle.
Railway targets not reduced
Railway Board Chairman Satish Kumar had requested a reduction in the monetisation target from Rs 1.7 trillion to Rs 1 trillion. However, the panel did not accept his plea. Citing sources, the report mentioned that Kumar was “clearly told that the Rs 1 trillion target was unacceptable” but was given time to present a revised plan with innovative solutions.
Urban land monetisation concerns
The housing and urban affairs ministry was also criticised for setting a ‘too low’ target of Rs 5,000 crore for land monetisation in the capital. The ministry has primarily relied on NBCC to sell property to public sector companies in areas like East Kidwai Nagar, Nouroji Nagar, and Netaji Nagar.
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The government is now looking at land monetisation from PSUs separately from the Rs 10 trillion asset monetisation target. This shift in focus is due to limited past success, mainly through Infrastructure Investment Trusts (InvITs) and the Toll-Operate-Transfer (TOT) model used by NHAI and PowerGrid.
Highway monetisation target increased
According to the report, the road transport ministry has been given a new target of monetising 35,000 km of highways to raise Rs 3.5 trillion. This is 2.7 times higher than the previous target and accounts for 35 per cent of the total asset monetisation goal.
However, the ministry issued a fresh directive on February 21, instructing NHAI to halt the bidding process for TOT (Toll-Operate-Transfer) projects. Instead, it wants a ‘detailed comparative analysis’ between InvIT (Infrastructure Investment Trust) and TOT models, which must be submitted to Minister Nitin Gadkari’s office within a month.
“The process of bidding of TOT bundles will be kept on hold till such an analysis is completed and presented,” the directive stated.
Since 2018-19, TOT has contributed around 38 per cent of highway monetisation. The ministry has suggested a new approach where tolling rights could be granted for five years instead of the current 15-year model. It has also proposed securitisation of toll receivables through special purpose vehicles, similar to the Delhi-Mumbai Expressway Development Limited (DMEDL).
NHAI has been given a month to formulate a scheme for these new models and submit its report.
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