How is monetisation of assets under National Monetisation Pipeline (NMP) different from privatisation?
Under privatisation or sale of assets, the private sector is the whole-sole owner of a business or asset, enjoying complete autonomy over future sale of such assets, with no control or oversight from government on universal availability of services, affordability for consumers and the standards of service delivery. Under sale or privatisation, the private proponent owns the asset for perpetuity with no potential for buy-back or hand-back of assets. For mechanisms proposed under NMP, monetisation of assets is by way of structural contractual partnerships, similar to public-private partnership projects, which have now been undertaken for almost 20 years in the country. Well-defined contractual frameworks ensure redressal of challenges, including protection of interests of the public and common citizens.
Why is there a reluctance to sell off hotel assets outright?
Assets identified under the NMP are expected to be rolled out through a range of instruments. Specifically for hospitality assets, the report on NMP has identified models such as PPP concession, long-term leasing and disinvestment, among others. While the government is committed to its policy of ensuring minimal presence in non-strategic sectors, divestment of all such assets may not be possible. This is on account of multiple factors such as location, utilisation as also the preservation of generational equity in assets such as land, wherever this is deemed necessary. There is no one model that fits all concept.
Is the NMP an exercise in bridging the fiscal deficit ?
The strategic objective is to unlock the value of investments in public sector assets by tapping private sector capital and efficiencies, which can thereafter be leveraged for augmentation/greenfield infrastructure creation. While one of the objectives is to improve the fiscal headroom through innovative financing alternatives, this is not an end in itself. This, in fact, is an overall strategy for, one, bringing about a paradigm shift in infrastructure O&M and augmentation. Two, creation of infrastructure investment alternatives for institutional investors. Three, enabling retail investors to invest in specialised infrastructure assets through instruments, such as InvITs.
How confident are you of meeting the target, particularly this year?
NMP, which has been prepared only in four-to-five months, has been the first stept. Of the assets identified for FY22, PowerGrid has launched its first public sector InvIT, raising Rs 7,700 crore. NHAI has also placed its draft offer document with the regulator and is in advanced stages of the transaction. Various other sectors such as natural gas pipelines, railways, ports, airports are in advanced stages of approval or bidding. We are, hence, confident of achieving our targets for the current as well as future years.
