New Delhi : After tasting success with Infrastructure Investment Trusts (InvITs) in the power and road sectors, the government is planning to replicate the model of asset monetization in railways, aiming to attract private investment in several operational sectors.
According to two people aware of the development, the plan is to launch the Railway InvIT as a special purpose vehicle that will transport operational assets such as goods sheds, track signaling and overhead equipment (track OHE), rail tracks of the Dedicated Freight Corridor Corp. Will park (DDFC) where track access charges are proposed to be levied, certain railway stations, city side rail infrastructure development projects, including hotels, shopping centers and entertainment centres.
There could be a single InVIT holding all these assets, or there could be several smaller ones, as the people cited above spoke on the condition of anonymity.
“The best case has to be specific InvITs. Hence, the plan is to look into the Track Signaling and Overhead Equipment (Track OHE) invitation anchored by DDFC; Another InvIT may have only railway goods depots and warehousing facilities,” said one of the two people.
Queries sent to Indian Railways remained unanswered till press time.
InvITs work like mutual funds, where investors buy units in trust that are listed on exchanges; These units receive a regular income stream, as well as dividend payments.
Through InvITs, investors can invest in lucrative, operational rail projects and earn returns for 15-20 years.
For Railways, it will help in getting advance funding for investments made in building these assets. The National Highways Authority of India and Power Grid Corporation of India already have operational InvITs, which have allowed them to monetize assets.
Those cited earlier said the possibility of InvITs has been discussed between the Indian Railways and NITI Aayog, and the national transporter has now asked all its PSUs to come up with specific proposals and identify assets that would be held in such trusts. Can be parked.
Once the inputs are made available, Indian Railways can go ahead with the InVIT scheme. While the actual amount and size of InvITs are yet to be worked out, this could be a modest start 2,500-3,000 crore, and more assets may be placed in it for later monetization.
Officials said the structure is expected to be finalized before the end of the year.
The government’s National Monetization Pipeline (NMP), finalized in August, aims to increase 6 trillion through asset monetization in FY22-25, with FY23 target set 1.67 trillion.
Target just met in FY22 88,000 crore, which was collected by the government, was crossed 96,000 crore last year.
four years old 6 trillion target, railways share 1.52 trillion, the second largest after roads ( 1.60 trillion).
In FY22, railway monetization was almost negligible; And this year also the exercise has been sluggish.
Railway InvIT is expected to provide the necessary impetus to asset monetization by the national transporter.