If it goes through, it may turn out to be the mother of all public asset sales – Rs 3 lakh crore of proceeds by monetising public sector transmission lines, telecom towers, gas pipelines, airports and, as ET had earlier reported, land parcels.
Government think tank , after consultation with many ministries, has drawn up a list of assets that can be sold including electricity transmission lines of Power Grid, towers of BSNL & MTNL, pipelines of Gail India Ltd, airports in some cities and prime real estate owned by central public sector enterprises. CPSEs in the Niti list that have monetisable land assets include National Textile Corporation, Hindustan Antibiotics and NTPC.
“The idea is to push CPSEs to monetise their existing assets and use the proceeds to fund greenfield assets,” a government official said.
Unspent Proceeds to go to Govt
The official added that if CPSEs are unable to use the proceeds towards capital expenditure it will flow to the government through dividends or other routes. The official spoke off record.
“Towers of BSNL & MTNL can be further leased out, or in some cases sold outright,” said the above quoted official adding that the pipeline business of GAIL can be demerged from the parent company and given on long termlease or completely sold off depending on buyer interest.
BSNL and MTNL have already rented out 13,051 and 392 mobile tower sites, respectively, to private telecom service providers. Powergrid owns and operates about 1,45,400 circuit kms of transmission lines, GAIL owns over 11,500-km of natural gas pipelines in the country.
In March 2019, Canadian fund Brookfield had bought 1,400 km of pipeline owned by Reliance Industries for Rs 14,000 crore.
The department of investment and public asset management (DIPAM) has already issued expression of interest for appointing consultants who will provide transaction advisory services for monetisation of land assets.
“Land assets can also be monetised through Real Estate Investment Trust (REIT) route. Already, firms such as Boston Consulting Group (BCG), Cushman & Wakefield and Colliers International have expressed their interest,” said another official aware of the developments. He, too, spoke off record.
There will be increased focus on strategic sales as well this year as the government has the mandate to bring down its holding in select public sector firms to below 51%. The government has set a disinvestment target of Rs 1.05 lakh crore in 2019-20.
Finance minister Nirmala Sitharaman had said that the central government will be open to bringing down its stake below 51% in a government-owned company provided the combined stake of the government and government-owned agencies stays above that threshold. Already, there is ‘inprinciple’ approval for strategic disinvestment of 23 central public sector enterprises (CPSEs).