BharatNet to lead asset monetisation drive, to fetch Rs 30,000 crore

The Centre will focus on monetisation of coal and mineral blocks, highway stretches, the BharatNet fibre network and urban real estate to achieve the ambitious Rs 1.62-trillion asset recycling target for FY23, even as the railways is seen missing its target for the second year in a row by a wide margin, sources told FE.

The government is eyeing up to Rs 50,000 crore from the auction of mineral and coal blocks in FY23 against a target of about Rs 6,000 crore set initially. Around Rs 30,000-38,000 crore is expected from the securitization of toll receivables from expressways such as Delhi-Amritsar-Katra, Infrastructure Investment Trusts (InvITs) and Transfer-Operate-Transfer (ToT) models as against a target of Rs 32,855 crore for the next financial year.

After the government unveiled the National Monetisation Pipeline (NMP) in August 2021, this ambitious project to boost non-debt capital in the government sector got off to a quick start. Despite railways achieving just Rs 390 crore against a target of Rs 17,810 crore, revenues/investments mobilised via this route could still be marginally above the target of Rs 88,200 crore in FY22, the first year of the NMP. Coal and mineral mines (i.e., iron ore, bauxite and copper) auction contributed about Rs 50,000 crore, as against an annual sectoral target of just Rs 3,394 crore, helping the Centre achieve the FY22 target.

The NMP seeks to generate upfront revenues/investments of Rs 6 trillion in four years starting FY22, out of operational infrastructure projects, under various innovative long-term lease plans that don’t require the government to cede ownership of the assets much.
“We have almost readied Rs 1 trillion of projects for monetisation next year that are ready to go across sectors. Others will progress as we move on,” an official said.

Bid documents are ready to invite private telecom players and investors to bid for Bharat Broadband Network’s 3 lakh km of optical fibre network to upgrade, operate and maintain across the country including states such as Haryana and Punjab where the premium could be high, the official said. This transaction along with BSNL/MTNL tower monetisation could fetch about Rs 30,000 crore in FY23 as against the target of Rs 20,180 crore.

Even though urban real estate is part of NMP, no monetary value was assigned to it. Officials said this sector has huge potential and could generate Rs 15,000-30,000 crore in FY23.

The government is in the process of inviting bids for the Ashok Hotel in central Delhi with a lot of prime vacant land where another two commercial towers can be built. The Ashoka Hotel lease and development of vacant plots could generate Rs 7,000-8,000 crore monetization value in terms of upfront accruals and investment.

Similarly, redevelopment of government residential colonies in Delhi are being envisaged as another big pull for private investment. Private developers will self-fund the projects and hand over a fixed number of dwelling units to the government at zero cost in lieu of a long term lease to the private party to construct houses and offices for commercial purposes.

While most other plans for asset monetisation from power transmission lines to warehouses and stadiums will be on track, railways will need to restructure its bid documents for station redevelopment and running of private trains by putting commercially viable terms and conditions for it to succeed, another official said. Financial Express