Road assets worth Rs 1.60 lakh crore will be monetised over four years till FY25 under the ambitious national asset monetisation plan announced by Finance Minister Nirmala Sitharaman on Monday.
Sitharaman said the asset monetisation does not involve selling of land and it is about monetising brownfield assets.
The road assets monetisation will be implemented by the Road Transport and Highways Ministry and the National Highways Authority of India (NHAI).
Niti Aayog CEO Amitabh Kant said the potential models of road assets monetisation would be Toll Operate Transfer (ToT) and InvIT.
ToT is one of the key models for monetisation successfully employed in the roads sector both by central and state entities.
The Ministry of Road Transport and Highways (MoRTH) introduced the TOT concession framework in 2016 for monetisation of road assets portfolio by NHAI to long-term investors.
The TOT model primarily entails securitisation of the toll receivables by collecting an upfront concession fee from the selected bidder and determined through a transparent competitive bidding mechanism.
Infrastructure Investment Trust (InvIT) is an innovative trust-based financial instrument, which enables participation in infrastructure financing through a stable and liquid instrument.
InvITs provide an opportunity to invest in infrastructure assets with predictable cash flows and dividends.
InvITs have been introduced in India in 2014 and are employed by infrastructure asset owners to pool in money from a diverse set of investors against pay-out of cash flow generated by the assets on a periodic basis.
Sitharaman on Monday announced a Rs 6 lakh crore National Monetisation Pipeline (NMP) that will look to unlock value in infrastructure assets across sectors ranging from power to road and railways.
Union Budget 2021-22 had identified monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing.
Towards this, the Budget provided for preparation of a 'National Monetisation Pipeline' of potential brownfield infrastructure assets. NITI Aayog in consultation with infra line ministries has prepared the report on NMP.
