We are covering volume 2 of Niti Aayog’s publication of “National monetization pipeline volume II: Asset pipeline” which actually clarifies the source of monetization from various departments or corporates, the indicative monetization value and the process of doing them. Let us look at the publication from the website:


Contained over 114 pages, the publication deals with the following chapters:

1. Chapter 1. Context and Approach

2. Chapter 2. National Monetization Pipeline

3. Chapter 3. Sector – wise Pipeline

4. Chapter 4. Implementation plan.

National monetization pipeline

Before we venture to understand the details of massive monetization of assets with vast details, let us understand the following para from the report as an introduction.

“Union Budget 2021-22 – Laying the foundation!

 Development Finance Institution – The budget provided for establishing a professionally managed DFI to act as a provider, enabler, and catalyst of infrastructure financing. Subsequently, the National Bank for Financing Infrastructure and Development (NBFID) Bill, 2021 was passed.

The bill enabled the creation of a DFI – “NBFID”, as a corporate body with authorized share capital of Rs 1 lakh crore. The central government’s share in the entity is envisaged to remain above 26% (currently at 100%) and the Central Government envisages to capitalize this DFI with initially Rs 20,000 crore.

The central government will also provide guarantee at a concessional rate of up to 0.1% for borrowing from multilateral institutions, sovereign wealth funds, and other foreign funds. The budget envisioned the DFI to have a lending portfolio of at least Rs 5 lakh crore in three years’ time.”

Can we go ahead with the objectives of NMP, narrated below as the initiation and proceed further:

Key Objectives of NMP:

i. Serve as a medium-term roadmap for the line ministries and agencies

ii. Provide medium-term visibility to investors on infrastructure assets pipeline

iii. Provide a platform for ministries to track asset performance

iv. Bring in greater efficiency and transparency in public assets management.

As a natural curiosity, what are the central sector agencies identified and mapped?

The core infrastructure assets covered include roads, ports, airports, telecom, railways, warehousing, energy pipelines, power generation, power transmission, hospitality, and sports stadiums.

 Besides these conventional infrastructure sectors, assets from mining and housing redevelopment sectors have also been included in the NMP owing to the potential of these sectors to spur private sector investment and to enable tracking of transactions as part of the Monetization pipeline.

Let us be very clear that monetization through disinvestment and monetization of non-core assets (such as land, building, and pure play real estate assets) have not been included in the NMP.

We may have to reflect on the facts stated that assets which are central to the business objectives of a public entity/ statutory body/ Government body and/or are being utilized for delivering infrastructure services to public/ users have been categorized as Core Assets for the purposes of monetization.

 For each sector, the NMP has been drawn up for the statutory bodies, public sector enterprises and other such undertakings within the purview of ministries/ departments.

Leaving theoretical discussions, let me ask information on

(i) Potential Asset Base,

(ii) Assets considered for Monetization and

(iii) Indicative Monetization Value?

The four approaches that are considered to estimate the Indicative monetization value of the pipeline are market approach, capex approach, book value approach, and enterprise value approach.

Let me give details of Asset class-wise approach adopted for indicative monetization value.

Market approach: roads, power transmission, and tower assets.

Capex approach: Ports, airports, railway stations, passenger trains, private freight terminals, railways colonies development, sports stadia, ware housing, Bharat fibre assets, mining, and urban housing redevelopment.

Book value approach: Traffic infrastructure under DFCCIL, power generation.

EV approach: Track OHE, natural gas pipeline, product pipeline.

Can I have the breakup of the overall pipeline and the sectoral share?

The aggregate asset pipeline over FY22-25 under NMP is indicatively valued at Rs 6.0 lakh crore. The overall sectoral contribution from FY 2022 to FY 2025 is shown below:

FY 22 Rs Cr. 88190

FY 23 Rs Cr. 162422

 FY 24 Rs Cr. 179544

 FY 25 Rs Cr. 167345

The top 5 sectors (by estimated value) capture ~83% of the aggregate pipeline value.

These top 5 sectors include: Roads (27%) followed by Railways (25%), Power (15%), oil & gas pipelines (8%) and Telecom (6%). Roads and Railways together contribute ~52% of the total NMP value.

The assets and transactions identified under the NMP are expected to be rolled out through a range of instruments.

 The choice of instrument is determined by the sector, nature of asset, timing of transactions (including market considerations), target investor profile and the level of operational and/or investment control envisaged to be retained by the asset owner.

 20+ asset classes, 12+ line ministries / departments

 Top 3 sectors: Roads (27%) Railways (26%) and Power (15%) by value Pipeline Phasing: 15% of assets.

Let us consider some important sectors like roads, railways, or water ways for discussion.


Asset Length to be monetized: 26700 Kms.

 Asset Length as a percentage of Potential Asset Base (%): 20%

 Indicative Monetization Value over FY 2022-2025 (Rs crore): 160,200

Share in overall NMP in value terms (%):27.

Let us scan more details.

The Potential Asset Base for roads sector includes aggregate National Highway (NH) road length estimated at about 1,36,155 km7 as on December 20, 2020. In terms of lane-wise distribution of NHs as on March 31, 2019, of the total NH network, 23% (~31,067 km) is comprised of four-laned roads8 and above, 49% are two-laned roads, and the rest are comprised of roads with less than two lanes.

An important additional news.

It is estimated that in recent years, majority of the projects are being awarded through EPC and HAM mode and NHAI retains the tolling rights over these stretches (and hence amenable for monetization)

What are the important factors influencing monetization of asset class?

  • Since 2017, the NHAI has been successfully monetizing its brownfield road assets through Toll Operate Transfer (TOT)-based PPP concessions.
  • InvIT model is another great success. It got detailed coverage in my earlier article.
  • What are the evolved regulatory developments?
  • Changes in Model Concession Agreement (MCA) of BOT (Toll) Project
  • Changes in MCA of TOT framework: Change in the MCA of TOT Model removing the concerns of investors and stakeholders.
  • Changes in MCA of HAM model: To address the issues relating to NH Projects under Hybrid Annuity Mode (HAM) raised by stakeholders, required changes were made.
  • With greater transparency in operations, asset aggregators with sound corporate governance practices, such as Infra focused PE funds, sovereign wealth funds, pension funds, etc., will start participating in operational road assets with established base traffic.

Assets considered for monetization

The operational NHs constructed under EPC and HAM modes, especially in the 4-lane and above category have been considered for monetization which translates as ~16,387 kms as on March 31, 2020.

The total assets considered for monetization over the 4-year period from FY 2022 to FY 2025 aggregate to ~26,700 km.

How do I get arriving at monetization value?

As stated at the beginning, indicative monetization value has been estimated based on the ‘Market approach’.

The multiple (in Rs crore per km) to estimate the indicative value is based on the average blended factor at Rs 6 crore per km.

Yes, as covered during the first article, NHAI is in the process of monetizing its completed and operational highway projects under the Infrastructure Investment Trust route to mobilize additional financial resources through the capital markets after getting due clearance from the Cabinet.

More details available on pages 34 and 35.



Rs 152,496 crore -Indicative (Monetization Value over FY 22-25)   26% – share in overall NMP in value terms.

Key assets for monetization over FY22-25 (% of Potential Asset Base)

Railway stations:  400 Nos. (5.5% of stations)

Passenger trains: 90 Nos. (5% of total trains)

Railway track: 1 route of ~1,400 km (2% of network)

Konkan Railways:  741 km

Hill Railways: 4 Nos. 244 km route

Railway owned Good sheds:  265 Nos. (21% of total good sheds)

DFC track and allied infrastructure:  673 km (20% of total DFC network)

Others–Railway colonies and stadiums:   15 Railway stadiums and rly. colonies Discussion

Let me quote from the report for clearer understanding:

“Indian Railways (IR) is the fourth-largest railway network in the world by size, with 121,407 km (75,439 mi) of total track over a 67,368 km route.

 With IR’s focus on augmenting railway infrastructure to facilitate freight and passenger movement, significant investments will be needed to address capacity constraints.

 The Potential Asset Base considered includes assets owned and operated under the Ministry of Railways (MoR) (including identified PSUs and entities under MoR).”

 The key assets across categories relevant to the monetization process are shown in the table below.

From 37 of the report………

Total Potential Asset Base for key asset classes

S. No Asset class Value
1 Railway stations 7,325 nos.
2 Passenger trains 13,169 nos.
3 track infrastructure- route length 67,956 km
4 Existing Railway owned Goods sheds 1,246 nos.
5 Hill railways 5 nos.

Total length of Eastern & Western Dedicated Freight Corridor (DFC), excl. Sonnagar Dankuni section on PPP mode (target date of commissioning is June 2022) 2,843 km

What are the factors influencing monetization of asset classes?

  • High commercial potential of the assets and a massive footprint – IR assets (especially railway stations, MFCs, goods sheds, etc.) are typically centrally located in prime locations having high commercial potential due to the presence of such assets in key urban centers.
  • Dedicated institutional arrangements to drive the monetization agenda –Railway station development agenda lies at the heart of the sector’s monetization drive.
  • PPP Framework: To standardize PPP framework for Railway Projects, model concession agreements (MCA) for various projects viz. station redevelopment, private passenger train etc. have been developed.
  • Why so much importance to railways monetization? The Draft NRP 2020 provides a strategic direction to the sector for the next 30 years, which includes an increase in the modal share (freight) of railways from 26% to 45%, while continuing to provide best-in-class services for passenger.

Let us elaborate the efforts to wards optimum utilization of water routes?

So far, we have heard of Chola kings’ efforts to send their kids to far away places in South East Asia or earlier efforts of Ashoka king to spread peace around the world by encouraging his kids/country men to spread Buddhism around the world.

It is time to learn what we intend to monetize water resources so that the rivers, ponds, and the oceans around India are properly kept, cleanly maintained and the average Indian can co-exist with nature?

Let us learn about monetization which will keep our ports up to world standards to improve our maritime exports/imports?


31 projects in 9 major ports Rs. 12,828 crore 2% share in NMP (Number of dev. Projects planned.) Indicative Investments over FY 2022-25

Let us await Maritime India Vision 2030 with bated breath.

Maritime India Vision 2030

Do you know that:

  • Maritime India Vision 2030 (MIV 2030) is a ten-year blueprint for the maritime sector that was released by the Prime Minister of India at the Maritime India Summit in February 2021.
  • It aims to boost waterways, give a fillip to the shipbuilding industry, and encourages cruise tourism.
  • To regain India’s glory in global maritime sector, the Ministry of Ports, Shipping and Waterways formulated the MIV 2030, a blueprint to ensure the coordinated and accelerated growth of India’s maritime sector over the next decade.
  • MIV 2030 has been formulated in consultation with over 350 public and private sector stakeholders, comprising ports, shipyards, inland waterways, trade bodies and associations, national and international industry, and legal experts.
  • As part of MIV 2030, Major Ports need to undertake 423 MTPA capacity addition. A total investment cost of over INR 33,400 Cr. has been envisaged for this capacity expansion. Out of this, approximately 95% capacity expansion is likely to be planned under Public Private Partnership (PPP)/ Captive mode by Major Ports.
  • What is the monetization value?
  • The total estimated capex towards 31 identified projects considered for monetization is estimated at Rs 14,483 crore for FY 2022-25.
  • Out of 31 projects, 13 projects with expected capex of Rs. 6,924 crores are envisaged to be tendered out in FY 2022, followed by another 10 projects with expected capex of Rs. 4,680 crores are envisaged to be tendered out in FY 2023.

Pages 93-99 contain extensive notes on above subject. 100% FDI permitted under the automatic route.

Central government has already taken multiple initiatives like Major Port Authorities Act 2021 which enables Major ports to move from a service model to a landlord model and bring in more private sector participation to drive operational efficiency.

What to look forward in future?

Let me input the statement from page 107 of the report for looking forward:

“Successful implementation of NMP hinges on an effective governance framework with escalation matrix for real time monitoring of progress. This will help all stakeholders in monitoring the implementation of projects by comparing actual progress vis-a’-vis planned pipeline for the NMP assets.”

How does the report visualize successful implementation of NMP?

1. Consistent policy and regulatory support

2. Periodic review by empowered

3. Real time monitoring through dash- board

4. Finalization of pipeline and yearly targets

5. Handholding and capacity building

How to ensure an efficient and effective process of asset monetization?

These will include streamlining operational modalities, encouraging investor participation, and facilitating commercial efficiency, among others. Union Budget 2021-22 has been a witness to commitment of the Government in this regard.

Initiative to enable ‘Infrastructure Creation through Monetization’ wherein the public and private sector collaborate, each excelling in their core areas of competence, so as to deliver socio-economic growth and quality of life to the country’s citizens.

This is the ultimate objective of above activity which has never been attempted in a business-like manner. But the results of road building excelling each year’s targets project a promising future.

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting because of the above write up. The possibility of other views on the subject matter cannot be ruled out. By use of the said information, you agree that Author/Tax Guru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors, or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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