Interview | We have a number of assets in advanced stages of bidding: Amitabh Kant

Asset Monetisation is a principle that our government has adopted for enabling overall socio-economic growth and public welfare. This is centered around optimal utilisation of assets/resources and maximisation of economic value. As a philosophy, this applies to all government assets, including core infra and non-infra assets, investment in public sector entities, and land and buildings, among others.

However, in terms of the objectives, approach and modality of monetisation, these categories will be fundamentally different from each other. For instance, while core infrastructure assets are specialised assets used for delivering infrastructure services to the public, land and buildings are cross-cutting assets with diversified end-use for both public and private purposes. Separate profiling, targets and a governance structure are hence necessary for these various categories of assets.

Union Budget 2021-22 had announced a ‘National Monetisation Pipeline’ focusing exclusively on ‘brownfield infrastructure assets’ and this has been currently included under NMP. A similar exercise for cataloguing information on land and buildings, and potential assets therein, is being undertaken separately. The government is committed to adopting a systematic approach to monetisation for all categories of assets and in order to ensure convergence, the monitoring and governance framework for these categories will be aligned under a single platform.

While the targets announced by the government as part of the National Monetisation Pipeline are ambitious, how confident are you of private players coming in at a time when the private sector remains wary of investments, citing the pandemic? How confident are you of meeting this year’s monetisation target of Rs 80,000 crore?

NMP is targeted at de-risked brownfield assets with a stable revenue-generation profile. Given the negligible construction risk in these assets, I am reasonably confident of attracting investor interest.

Further, with the potential for monetisation by way of capital market instruments such as InvIT etc, I believe, this is an opportune moment for launching transactions around such models, so as to ensure maximisation of accruals.

Implementation is a critical aspect under NMP. NITI Aayog and the Ministry of Finance are working in close coordination with the ministries to ensure all necessary policy support and process efficiency for realisation of aspirations set under the NMP. Work on rolling out the initially identified assets has already been undertaken/initiated in several cases.

Of the assets identified for FY 2022, 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 currently at an advanced stage of the transaction. Various other sectors such as natural gas pipelines, railways, ports, airports etc. are in advanced stages of approval or bidding. We are, hence, confident of achieving our targets for the current as well as future years.

Experts, including Vinayak Chatterjee, have said that since the monetisation pipeline does not include sale of non-core assets, it is essentially a PPP framework, wherein the Centre owns the assets and just leases them out to private players. Given India’s past experience with PPP, is it prudent to go down that path again?

The key to success under any public private partnership project is the right structuring, a balanced risk-sharing framework and flexibility to deploy innovative business models. Even as the level of attractiveness varies across sectors based on the elasticity of demand, prices etc, a suitably balanced and well-drafted contract can ensure protection of the interests of both the public and private partner and ensure best-in-class service to consumers.

This is the precise objective under NMP while designing these transactions as structural contractual partnerships. Extensive stakeholder consultation has already been undertaken by NITI Aayog while preparing NMP and any model proposed for an asset / asset class will further engage extensively with the stakeholders so as to ensure minimal challenges in future.

Considering that the target sectors under NMP are economic infrastructure sectors with a sizeable private sector appetite and synergies, I believe public private partnership is the way to go for Indian infrastructure.