National Monetisation Pipeline: Critical Analysis

• Union Budget 2021-22 has identified the monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing.
• Towards this, the Budget provided for the preparation of a ‘National Monetisation Pipeline (NMP)’ of potential brownfield infrastructure assets. NITI Aayog in consultation with infra line ministries has prepared the report on NMP.
• NMP aims to provide a medium-term roadmap of the programme for public asset owners; along with visibility on potential assets to the private sector.

The report on NMP has been organised into two volumes.

• Volume I is structured as a guide book, detailing the conceptual approaches and potential models for asset monetisation.
• Volume II is the actual roadmap for monetisation, including the pipeline of core infrastructure assets under Central Govt.

Framework

• The pipeline has been prepared based on inputs and consultations from respective line ministries and departments, along with the assessment of total asset base available therein.
• Monetization through Disinvestment and monetization of non-core assets have not been included in the NMP.
• Further, currently, only assets of central government line ministries and CPSEs in infrastructure sectors have been included. The process of coordination and collation of asset pipeline from states is currently ongoing and the same is envisaged to be included in due course.

The framework for monetisation of core asset monetisation has three key imperatives:

This includes the selection of de-risked and brownfield assets with a stable revenue generation profile with the overall transaction structured around revenue rights. The primary ownership of the assets under these structures, hence, continues to be with the Government with the framework envisaging a hand back of assets to the public authority at the end of transaction life.

Estimated Potential

• Considering that infrastructure creation is inextricably linked to monetisation, the period for NMP has been decided so as to be a co-terminus with the balance period under National Infrastructure Pipeline (NIP).
• The aggregate asset pipeline under NMP over the four-year period, FY 2022-2025, is indicatively valued at Rs 6.0 lakh crore.
• The estimated value corresponds to ~14% of the proposed outlay for Centre under NIP (Rs 43 lakh crore). This includes more than 12 line ministries and more than 20 asset classes.
• The sectors included are roads, ports, airports, railways, warehousing, gas & product pipeline, power generation and transmission, mining, telecom, stadium, hospitality and housing.
• The top 5 sectors (by estimated value) capture ~83% of the aggregate pipeline value. These top 5 sectors include: Roads (27%) followed by Railways (25%), Power (15%), oil & gas pipelines (8%) and Telecom (6%).
• In terms of annual phasing by value, 15% of assets with an indicative value of Rs 0.88 lakh crore are envisaged to be rolled out in the current financial year (FY 2021-22). However, the aggregate, as well as year-on-year value under NMP, is only an indicative value with the actual realization for public assets depending on the timing, transaction structuring, investor interest etc.
• The assets and transactions identified under the NMP are expected to be rolled out through a range of instruments. These include direct contractual instruments such as public-private partnership concessions and capital market instruments such as Infrastructure Investment Trusts (InvIT) among others. The choice of instrument will be determined by the sector, nature of the asset, timing of transactions (including market considerations), target investor profile and the level of operational/investment control envisaged to be retained by the asset owner etc.
• The monetisation value that is expected to be realised by the public asset owner through the asset monetisation process, may either be in form of upfront accruals or by way of private sector investment.
• The potential value assessed under NMP is only an indicative high level estimate based on thumb rules. This is based on various approaches such as market or cost or book or enterprise value etc. as applicable and available for respective sectors.

Implementation & Monitoring Mechanism

• As an overall strategy, significant share of the asset base will remain with the government.
• The programme is envisaged to be supported through necessary policy and regulatory interventions by the Government in order to ensure an efficient and effective process of asset monetisation. These will include streamlining operational modalities, encouraging investor participation and facilitating commercial efficiency, among others. Real-time monitoring will be undertaken through the asset monetisation dashboard, as envisaged under Union Budget 2021-22, to be rolled out shortly.
• The end objective of this initiative to enable ‘Infrastructure Creation through Monetisation’ wherein the public and private sector collaborate, each excelling in their core areas of competence, so as to deliver socio-economic growth and quality of life to the country’s citizens.

Earthquake-resistant buildings using Thermocol

• Thermocol could be the material of the future for the construction of Earthquake resistant buildings, with thermal insulation and could also save the energy required to develop construction materials.
• Researchers at IIT Roorkee have found that thermoacol or Expanded Polystyrene (EPS) is used as a composite material in the core of reinforced concrete sandwiches, and could resist earthquake forces on up to four-storey buildings.
• The researchers tested a full-scale building and a number of wall elements constructed with thermocol sandwiched between two layers of concrete at the National Seismic Test Facility (NSTF) of the Department of Earthquake Engineering, IIT Roorkee, developed under the Fund for Improvement of S&T Infrastructure (FIST) programme of Department of Science & Technology (DST), Government of India. Mr Adil Ahmad, the research Scholar who conducted the tests, evaluated the behaviour of the constructions under lateral forces, as earthquake causes a force predominantly in the lateral direction.
• The investigation was supplemented with a detailed computer simulation of a realistic 4-storey building. Prof. Yogendra Singh, supervising the research, informed that the analysis shows that a four-storey building constructed with this technique is capable of resisting earthquake forces, even in the most seismic zone (V) of the country, without any additional structural support.
• They have attributed this earthquake resistance capability to the fact that the EPS layer is sandwiched between two layers of concrete having reinforcement in the form of welded wire mesh.
• The researchers said that the force being applied on a building during an earthquake arises due to the inertia effect and hence depends on the mass of the building. Thermocol resists earthquakes by reducing the mass of the building.
• In this technique, the EPS core and the wire mesh reinforcement is produced in a factory. The building skeleton is first erected from the factory-made core and reinforcement panels, and then concrete is sprayed on the skeleton core. This technique does not require any shuttering and hence can be constructed very fast.
• Besides resisting earthquakes, the use of expanded polystyrene core in concrete walls of a building can result in thermal comfort. The core provides the necessary insulation against the heat transfer between the building's interior and exterior environment. This can help in keeping the building interiors cool in hot environments and warm during cold conditions. India suffers a large variation in temperature in different parts of the country and during different seasons of the year. Therefore, thermal comfort is a crucial consideration along with structural safety.
• The technology also has the potential of saving construction materials and energy, with an overall reduction in the carbon footprint of buildings. It replaces a large portion of concrete volume from the walls and floor/roof. This replacement of concrete with the extremely lightweight EPS not only reduces mass, thereby decreasing the earthquake force acting on a building but also diminishes the burden on the natural resources and energy required to produce the cement concrete.

Yuktadhara - Geospatial Planning Portal

• Yuktadhara is a geospatial planning portal for facilitating Gram Panchayat level planning of MGNREGA activities across India using Remote Sensing and GIS-based information.
• It integrates a wide variety of spatial information contents to enable a holistic approach toward planning using open source GIS tools.
• The current level of integration under Yuktdhara, as a part of Bhuvan, incorporates multi-temporal IRS satellite data of better than 3 m detail in natural colour, digital terrain, thematic layers as well as locations of MGNREGA works and watershed management assets.
• This platform will serve as a repository of assets (Geotags) created under various national rural development programmes i.e. MGNREGA, Integrated Watershed Management Programme, Per Drop More Crop and Rashtriya Krishi Vikas Yojana etc., along with field photographs.
• The name given is very apt as word ‘Yukt’ is derived from Yojanam, the planning and ‘Dhara’ indicates the flow. It is a culmination of untiring joint efforts of ISRO and Ministry of Rural Development made towards realising a G2G service for rural planning in support of decentralized decision making.
• Dr. Singh acknowledged the potential and services of ISRO’s Geoportal Bhuvan and said highlighted that due to its rich information base, satellite images and analytical capabilities, Bhuvan, in fact, has become a de-facto geospatial platform for number of developmental planning activities in the country.
• This portal integrates wide variety of thematic layers, multi-temporal high resolution earth observation data with analysis tools.
• Planners will analyse previous assets under various schemes and facilitates identification of new works using online tools.
• Plans prepared will be evaluated by appropriate authorities under State Departments.
• Thus, Yuktdhara based plans will be prepared by grassroot functionary and verified by appropriate authorities for relevance and resource allocation. This would ensure quality of plan and enable a long term monitoring of the assets created over the years.
• The Before-During-After Geotagging of assets has successfully implemented the progress based disbursement of the funds during the process of creation of rural assets.
• Also, a Citizen-centric Mobile Application JANMANREGA has helped rural population for providing feedback using Bhuvan services.
• Dr. Singh said that the Customisation on Bhuvan as per process requirement of Ministry of Rural Development, continuous handholding of State functionaries and also enthusiasm demonstrated by State Department personnel in adopting the technology for building GeoMGNREGA database is noteworthy and is a first of its kind massive exercise in the whole world.