NHAI outlines its asset monetization strategy for the first time
The state-run agency's 'Asset Monetization Strategy for the Road Sector' provides a blueprint to mobilize capital through toll-operate-transfer (ToT) model, infrastructure investment trusts (InvITs), and securitization.
The strategy is anchored in three core pillars: value maximization of government road assets; transparency of processes and dissemination of investor-relevant information; and market development through deepening the investor base as well as promoting stakeholder engagement.
As one of the early movers towards alternative financing mechanisms, the NHAI's strategy aligns with the Government of India's asset monetization plan for 2025-30. Instruments like ToT, InvITs and securitisation have helped the state-run agency to raise over ₹ 1.4 trillion so far across more than 6,100 km of national highways under the National Monetization Pipeline.
'The unique approach that NHAI has adopted towards asset monetization not only ensures financial sustainability but also opens opportunities for the private sector, leverages advanced technologies, enhances quality and longevity of our road assets,' said NHAI chairman Santosh Kumar Yadav. 'The successful implementation of this strategy will provide NHAI with a steady stream of financing, reducing our reliance on traditional funding sources.'
N.R.V.V.M.K. Rajendra Kumar, member finance, NHAI said, 'This document outlines a strategic framework to maximize the benefits of asset monetization. It emphasizes the need for a structured approach to identify and value assets, ensuring transparency and fostering investor confidence.'
According to ratings agency Crisil Ltd, for NHAI to reach its previous highs of 6,000 km per year of awards and execution, a substantial rise in private capital through acceleration in asset monetisation will be essential.
'We expect the share of monetisation in NHAI's sources of funds to grow to 18% in this fiscal and next, compared with 14% in the preceding two fiscals,' Crisil said in its report on infrastructure. 'What lends confidence here is a monetisable asset base worth ₹ 3.5-4 lakh crore.'
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