NHAI’s First Asset Monetisation Strategy for Road Sector

Context

The National Highways Authority of India (NHAI) has unveiled its first-ever Asset Monetisation Strategy, aimed at systematically unlocking value from operational highway assets and enhancing private sector participation in infrastructure development.

Asset Monetisation

Asset monetisation refers to the process of converting existing government-owned infrastructure assets into revenue-generating instruments by leveraging private sector investment and efficiency.

Purpose:

• To unlock the economic potential of underutilized public assets.
• To generate additional funding for new infrastructure projects.
• Encourages productive use of existing investments.
• Promotes public-private partnerships (PPPs) in infrastructure.
• Recommended first by the Vijay Kelkar Committee (2012) as part of a fiscal consolidation roadmap.

NHAI’s Modes of Asset Monetisation

NHAI utilizes three primary instruments under the National Monetisation Pipeline:

1. Toll-Operate-Transfer (ToT)
   • Private concessionaire pays an upfront amount to NHAI for operating a stretch of highway.
   • Responsible for Operations & Maintenance (O&M) during the concession period.
2. Infrastructure Investment Trusts (InvITs)
   • A pooled investment platform introduced in 2014.
   • InvITs raise funds by issuing units to investors and offer predictable returns, low risk, liquidity, and tax advantages.
3. Securitisation (via SPVs)
   • Project-based financing mechanism through Special Purpose Vehicles, allowing monetisation based on future cash flows from highway assets.

Performance So Far:

NHAI has successfully mobilised over ₹1.4 lakh crore by monetising more than 6,100 km of highways.

Highlights of the Asset Monetisation Strategy (2025–29)

• Designed as a medium-term roadmap and will be updated in FY 2028–29.
• Supports the broader National Asset Monetisation Plan (2025–30).
• Focused on unlocking value from operational highway assets to boost private participation and investment.

Key Objectives

1. Process Streamlining
   • Simplify and standardize monetisation activities to ensure efficiency and adherence to timelines.
2. Enhancing Transparency
   • Establish transparent procedures and public access to investor-related information.
3. Risk Mitigation
   • Identify potential risks and develop strategies to manage them proactively.

Strategic Pillars of the Monetisation Approach

1. Value Maximization
   • Proper selection and categorization of assets.
   • Fair asset valuation.
   • Structured and efficient execution of the monetisation process.
2. Transparency
   • Standard documentation and procedures.
   • Public dissemination of key project and investment information.
3. Market Development
   • Broaden the pool of domestic and global investors.
   • Foster increased stakeholder participation and engagement.
   • Improve investor confidence in NHAI’s monetisation initiatives.