New govt SPV may get powers to acquire, develop PSU land

The National Land Monetisation Corporation will soon be set up under the Companies Act and be 100% owned by the Centre. The entity will be able to rent, lease and develop assets to monetise them for a fee, an official said

The new special purpose vehicle (SPV) for monetising assets of public sector enterprises may also get powers to acquire and develop land and other assets on a caseto-case basis, besides renting and leasing them out.

The National Land Monetisation Corporation will soon be set up under the Companies Act and be 100 per cent owned by the government. The entity will be able to rent, lease and develop assets to monetise them for a fee, an official said.

The authorised share capital of the SPV has been pegged at ~5,000 crore.

A note has been prepared for constituting such an entity, and would soon be tabled before the Cabinet, the official added.

The SPV would be entrusted with hiring experts, and will devise a process to monetise government buildings, land of public sector undertakings (PSUS) and government departments.

It will also undertake transactions. It will house experts to resolve disputes that have hampered sale of such properties.

As the SPV would get power to acquire and develop idle land assets of PSUS which can’t be sold, it would look at converting such lands into revenue-generating, and financially-viable projects.

The SPV would also provide advisory services to government departments that are facing difficulty or delays in monetising their assets.

“The structure of the land SPV has been decided after detailed deliberations with experts and assistance from the World Bank. Sustainability of such a model has been deliberated extensively, post studying international practices,” the official quoted above said.

In the Budget speech, finance minister Nirmala Sitharaman had proposed incorporating an SPV to monetise surplus land with government departments and PSUS.

“Monetising of land can either be by way of direct sale or concession or by similar means,” Sitharaman had said.

The Finance Bill has also created an enabling environment for the land SPV by possibly exempting stamp duty on transfer of immovable property by one government-owned company to another.