Road monetisation central to NMP

Success of the National Monetisation Pipeline (NMP) unveiled by the Centre recently hinges critically on road assets, a CRISIL Research analysis underlines.

As per the report of the Task Force for the National Infrastructure Pipeline (NIP), 15-17% of the Rs 111-lakh crore investment outlay envisaged under it is to be met through innovative and alternative initiatives such as asset monetisation and funding through a development finance institution (DFI).

NMP has two stated objectives. One, to recycle public capital by generating upfront fees on the existing brownfield infrastructure assets and utilising the proceeds for new asset creation. Two, to bring in private sector efficiencies in operation and management of these assets sans the construction risk.

Monetisation of road assets holds the key here, as it accounts for ~27% of the NMP in value terms. The government aims to generate Rs 1.6 lakh crore by monetising 26,700 km of four-lane-and-above national highways via the toll-operate-transfer (TOT) and the infrastructure investment trust (InvIT) routes at Rs 6 crore per km.