MoRTH’s plans of record ₹60,000 crore monetization in FY25

 The Union Ministry of Road Transport and Highways (MoRTH) is looking to raise a record ₹60,000 crore from monetization in the current fiscal, two people aware of the matter said.

The higher monetization in FY25 is expected to maintain the momentum gained in last fiscal when for the first time a sum of ₹38,334 crore was mobilised from ToT, InvIT and project-based financing. This was a growth of over 64% over the FY23 figure of ₹23,336 crore.

Under the national monetization pipeline, road and highways have been given the highest target of monetizing core assets worth ₹1.6 trillion by FY25. MoRTH had already monetized assets worth ₹1.08 trillion since FY19 and is looking at adding another over ₹60,000 in FY25 to achieve its target.

MoRTH officials said that the monetization target would be achieved, as the NHAI has a large bank of completed projects that could be offered to the private sector for operation and maintenanceThere is also a plan to draw larger participation of global investors in the country’s infrastructure development programme by auctioning completed road and highway bundles directly to private sector InvITs.

This will be first time that completed and revenue-generating highways under the ‘toll operate transfer (ToT)’ mechanism will be directly and exclusively offered to private InvITs, who could then mobilize global investments by offering subscription of InvIT units. So far, the government has been offering road projects by nomination only to state-owned NHAI’s InviT, the National Highways Infra Trust (NHIT), while monetization of assets in other cases is being done by offering ToT projects to private highway developers.

An NHIT official said that they do have any guidance from the NHAI yet on how many projects would be offered to the InvIT. But, MoRTH officials said the NHIT may mobilize more than the ₹15,700 crore it raised last month. This could be ₹20,000 crore or more in FY25, the official said.

The NHAI also looks at mobilizing funds by securitizing future toll revenue in certain projects under the monetization exercise. Since FY19, the NHAI has monetised ₹42,334 crore worth of projects under the ToT route, while monetization has garnered ₹25,900 crore through the NHAI InvIT since FY22. The NHAI has also raised ₹40,227 crore through project-based financing since FY21.

A factor in favour of the ministry’s monetization drive is a revival in private sector interest in road and highway projects. Out of total capital investment of ₹3.01 trillion in the sector in FY24, ₹34,805 crore has come from the private sector, the highest ever.