Under-construction NHS to be leased once operational
The ministry of road transport and highways will monetise over 6,600 km of highways every year for the next four years under the recentlyunveiled National Monetisation Pipeline (NMP). This will be done after bringing in all existing road projects and upcoming contracts under one umbrella.
The NMP document states that the approach followed by NITI Aayog includes both existing operational National Highway (NH) assets and new National Highway roads that are constructed and operationalised over the next four years. This is based on the list of stretches received from the ministry coupled with secondary research on potential for monetisation of four-lane roads and other assets.
The aggregate length of assets considered for monetisation from FY22 to FY25 aggregates 26,700 km. This is based on the length of already/ to-be operational, four-lane highways and above. Build operate transfer (BOT) projects awarded under the public-private partnership (PPP) mode have been excluded, as tolling rights on these assets are retained by the private sector for the respective concession periods. Experts believe that a mix of brownfield and greenfield projects, to be offered under the NMP, would help in boosting investor confidence in the sector.
“The fact that an investor is keen to invest in a future road project reflects that the health of the sector is robust,” said an independent expert.
The total indicative monetisation value of assets considered for monetisation is estimated at ~1.6 trillion from FY22 to FY25. The asset pipeline has been phased out over the NMP period to ensure better preparedness and improved marketability. The potential asset base for the roads sector includes aggregate National Highway road length, estimated at about 136,155 km as on December 20, 2020.