Ministry Of Road Transport Targets Rs 60,000 Crore Asset Monetisation In Financial Year 2025

The Ministry of Road Transport and Highways (MoRTH) has set an ambitious target of raising Rs 60,000 crore from asset monetisation in the current fiscal year.

This move is part of the government's broader strategy to boost infrastructure financing and attract private investments.

MoRTH monetises its assets under three different modes, including —project-based financing, the toll-operate-transfer (TOT) model, and infrastructure investment trusts (InvIT).

These models offer a chance for all types of investors to invest in highway and associated infrastructure assets.

A significant portion of the amount is expected to be generated through the TOT highways, while approximately one-third is likely to come from the NHAI InvITs and private InvITs. For the first time, private InvITs may be directly offered road projects, marking a new milestone in infrastructure financing.

The increased monetisation target for FY25 aims to sustain the momentum achieved in the previous fiscal year when a record Rs 38,334 crore was mobilised from TOT, InvIT, and project-based financing. This represented a growth of over 64 per cent compared to the Rs 23,336 crore raised in FY23.

Under the National Monetisation Pipeline, the road and highways sector has been assigned the highest target of monetising core assets worth Rs 1.6 trillion by FY25. Since FY19, MoRTH has already monetised assets worth Rs 1.08 trillion and is now targeting an additional Rs 60,000 crore to meet its ambitious goal.

A former official of the National Highway Authority of India (NHAI) commented, “MoRTH's progress towards the Rs1.6 trillion monetisation target should be assessed from FY22 onward, when the national monetisation pipeline was established. Since FY22, MoRTH has monetised assets worth Rs 84,000 crore, indicating the need for further efforts this fiscal year,” reports Mint.

MoRTH officials remain optimistic about achieving the monetisation target, citing NHAI's extensive portfolio of completed projects available for private sector operation and maintenance. Furthermore, NHAI plans to rejuvenate the build, operate, transfer (BOT) model by issuing tenders for 53 projects covering 5,200 km and valued at Rs 2 trillion in the upcoming months.

To attract global investors, the government plans to auction completed road and highway bundles directly to private sector InvITs. This marks the first time that completed and revenue-generating highways under the TOT mechanism will be exclusively offered to private InvITs.

An NHIT official mentioned that they are yet to receive guidance from NHAI on the number of projects to be offered to InvITs. However, MoRTH officials believe that NHIT could raise more than the Rs 15,700 crore raised last month, potentially reaching Rs 20,000 crore or more in FY25.

Additionally, NHAI is exploring options to mobilise funds by securitising future toll revenue from certain projects under the monetisation initiative.

Since FY19, NHAI has monetised projects worth Rs 42,334 crore through the TOT route, while Rs 25,900 crore has been raised through NHAI InvIT since FY22. Moreover, Rs 40,227 crore has been mobilised through project-based financing since FY21.

The resurgence of private sector interest in road and highway projects is a key factor supporting MoRTH's monetisation drive. Out of the total capital investment of Rs 3.01 trillion in the sector in FY24, a record Rs 34,805 crore came from the private sector.