Big-bang monetisation of public infra assets via InvIT model could be on cards

A big-bang sale of India’s pipelines, railway tracks, power plants and transmission grids could be on the cards through Infrastructure Investment Funds (InvITs).
The government hopes this will help companies monetise mature assets and raise funds for fresh investments that could be ploughed into upgrading the country’s infrastructure.
This year’s Budget suggested the use of InvITs to monetise roads by the NHAI, but the idea may be expanded to include other assets as well. First notified in 2014, the regulator simplified rules to encourage such investment vehicles last year. India has two listed private-sector InvITs.
“Mature assets can be converted into trusts where investors can invest into trust units and the original asset holder gets the money back for making fresh investments,” said economic affairs secretary Subhash Chandra Garg.
Public sector companies can pool their assets through these InvITs to raise funds. Today, even in the public sector we have lots of assets — pipelines, railway tracks, power plants, transmission grids, all mature, developed assets.
NHAI has begun doing this through toll, operate and transfer (ToT) projects and the railways could be looking to sell and lease back 30,000 km of electric lines.
Power Grid Corp. of India has over 145,000km of transmission lines and 42,000km of optic fibre. Such a move will help accelerate the government’s programme of improving the country’s infrastructure.