Tuesday, August 14, 2018

Leading PSUs to monetise assets: Report

LEADING public sector enterprises, including SAIL and NTPC, will soon start selling their individual assets such as land and manufacturing units and funds realised thus would be invested in new projects.
Sources privy to the development said the government has set in motion an earlier plan that will make it mandatory for Central Public Sector Enterprises (CPSEs) to monetise identified assets so that funds are mobilised for investments in green field...
projects where private sector interest has almost dried up. The process will involve both sale and lease of assets.
The Department of Investment and Public Asset Management (DIPAM) and Niti Aayog, the government’s think-tank, have already started the exercise to identify such projects, assess their valuation and decide on a mechanism to sell them.
“We want to start with strategic sale of select assets of SAIL and NTPC. Based on initial experience, a list of other PSU projects would be finalised later,” said a government official asking not to be named.
The whole plan on asset monetisation is being finalised based on its success in the highway sector where National Highway Authority of India (NHAI) has been successful in getting good investor interest in some of its operational road projects. In fact, Niti Aayog has favoured reverse BOT (build, operate and transfer) model for all state-run infrastructure projects so that these projects are sold out and allowed to be run by the private sector.
The process could later involve companies and entities such as Powergrid Corporation, BHEL, NHPC, Airport Authority of India and others. State-owned agencies will just focus on creating new projects, including roads, airports, power and steel plants.
While the government is moving ahead with its innovative idea that found its place first in then finance minister Arun Jaitley’s budget speech of 2016, a few PSU heads are not comfortable with the idea to hand over projects build with their sweat on a platter to the private sector.
“We should look at finding buyers for some of our idle and deadwood projects rather than handing over those where PSUs have worked hard to get clearances and create a market,” said a PSUs head not wishing to be named.
NTPC is already looking at selling or closing down some of its old power plants that have depleted value for it. For SAIL, the plan is to identify private sector investors for its loss-making Salem steel plant and some of its processing units.

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