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National Land Monetisation Corporation (NLMC) has floated a request for empanelment of consultancy firms for providing transaction advisory services for monetisation of assets of Central Public Sector Enterprises (CPSEs) and other government agencies.
In a notice, it says it proposes “to empanel International Property Consultancy Firms (IPCs) or other consultancy firms or any other firms engaged in transaction advisory services, asset monetisation or project monetisation who will assist NLMC in formulating the monetisation strategy, conducting techno-economic feasibility studies of each of the assets and provide end to end transaction advisory services and ensure completion of transactions for monetisation of the assets.”
This move has been initiated at a time when Union Budget for FY24 is silent on monetisation.
The Budget has also scaled down the estimate under ‘Miscellaneous Capital Receipts’ to ₹61,000 crore in FY24 from ₹65,000 crore of FY 23 (BE), though it is slightly higher than Revised Estimate of ₹61,000 crore.
Miscellaneous Capital Receipts’ comprises of part sell of government equity in CPSE, strategic disinvestment, monetisation and other such transactions. Also, being last year before the before, experts do not see much action on monetisation, still move to empanel advisors being seen as intention for big push to monetisation.
NLMC undertakes monetisation of surplus land and building assets of CPSEs and other government agencies. Setting up of this body is in pursuance of the Budget announcement for 2021-22.
With monetisation of non-core assets, government would be able to generate substantial revenues by monetising unused and under-used assets and at the same time monetisation of surplus land and non-core assets will help in unlocking value of CPSEs, going for strategic disinvestment.
Request document
According to the request document, many of these non-core assets are diverse, spread out across the country and are sub-optimally utilised and can be appropriately monetized to create greater financial leverage and value for the companies and the Government, being the shareholder.
Earlier in a written response given, Minister of State for Finance, Bhagwat Kishanrao Karad had said in Lok Sabha that no specific target for non-core asset monetisation was given for the FY21-22 and 22-23.
For core assets, as per the information received from NITI Aayog, sectoral targets are mapped to various ministries including Road Ministry, Railway Ministry, Power Ministry, Shipping Ministry Civil Aviation Ministry and Oil Ministry under the National Monetisation Pipeline (NMP).
He informed that as against the indicative monetisation value of assets of ₹88,190 crore envisaged to be monetised during FY21-22, transactions with an aggregate monetisation value of about ₹97,000 crore in terms of accruals or private investments, were completed. Indicative value of assets envisaged to be monetized under NMP during FY22-23 is ₹1,62,422 crore.
NMP was announced on August 23, 2021. It taps private sector investment for new infrastructure creation. The estimated aggregate monetisation potential under NMP is ₹6.0 lakh crore through core assets of the Central Government, over a four-year period, from FY20-25. It contains more than 20 asset classes across more than 12 line ministries/departments.
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