Monetisation of railways’ assets is likely to be one of the key agenda items in the forthcoming Union Budget for 2023-24, which Finance Minister Nirmala Sitharaman is going to present on February 1.
In 2021-22, the Railway Ministry had set a target of monetising railways assets worth Rs 17,000 crore, however due to poor response from the private sector, the target could not be achieved.
Even this fiscal’s target of railways’ asset monetisation of Rs 57,000 crore is likely to be halved as the department has not been able to meet it till now, sources aware of developments, said.
It is likely to be brought down to around Rs 25,000 crore as the Railway Ministry has not been able to monetise its assets during the current fiscal and only three months are left for 2022-23 to end, the sources added.
Despite lack of enthusiasm shown by investors in railways’ assets, the government is bullish on pushing them and in the forthcoming Union Budget, it is likely to set a target, albeit a reasonable one, for monetisation of railways assets, the sources said.
Under asset monetisation, the government transfers revenue rights to private parties for a specified transaction period in return for a revenue share and commitment of investments in the assets.
The assets are monetised through models like Public Private Partnership (PPP) – Operate Maintain Transfer (OMT), Toll Operate Transfer (TOT), and Operations, Maintenance and Development (OMD).
Under monetisation, the government does not sell assets, but leases them for a certain period for redevelopment and operations by a private entity, while continuing to retain their ownership.