National Monetisation Pipeline: Govt Aims To Raise Rs 30,000 Crore From Highway Assets In FY22

Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, on Monday (23 August), launched the asset monetisation pipeline of Central ministries and public sector entities: 'National Monetisation Pipeline (NMP Volumes 1 and 2)'.

National Monetisation Pipeline (NMP) estimates aggregate monetisation potential of Rs six lakh crores through core assets of the Central Government, over four years, from FY 2022 to FY 2025.

The aggregate length of assets considered for monetisation in the road sector over FY 2022 to 2025 is estimated to be 26,700 km.

The total length of highway assets considered for monetisation (26,700 km) constitutes nearly 22 per cent of the entire National Highways (estimated to be about 1,21,155 km), excluding the network operated by the private sector under BOT (Toll) based PPP concessions.

Of these, the government aims to monetise around 5,000 km of highways in FY22 to raise almost Rs 30,000 crore. In FY23, the plan is to raise Rs 32,855 crore by monetising 5,476 km of highways.

In FY24, the government's goal is to monetise 7,330 km of highways to raise Rs 43,979 crore. Among the four years of NMP, FY25 constitutes the highest in the road sector with a plan to raise Rs 53,366 crore with the monetisation of 8,894 km of highways.

As an asset class, the Roads and highways have already monetised operating road assets and have generated growth capital to construct new roads under programs like the Bharatmala program.

Since 2017, the NHAI has successfully monetised its brownfield road assets through Toll Operate Transfer (TOT)-based PPP concessions. The TOT model has since matured and is now an established model with a model concession framework already in place.

Another method of monetisation that has seen traction in the recent past is the InvIT model. Several road assets have been monetised through InvITs by private sector players.