National Monetisation Pipeline – Fueling Economic Growth

INTRODUCTION

Monetisation of assets has  been  identified as one of the pillars for enhanced and sustainable infrastructure financing. The Finance Minister of India (“FM”) had, in December 2019, announced a National Infrastructure Pipeline (“NIP”) that envisages an investment of INR 111 lakh crore in the infrastructure sector in the period between 2019 and 2025 and brings in various opportunities for private sector to invest in infrastructure projects including the development and operation of the same. The FM in the annual budget 2021-2022 announced the launch of a new national monetisation pipeline[1] to bridge the gaps in infrastructure funding projects under the NIP and to unlock value from the current public investment in infrastructure through private sector efficiencies in operations and management of infrastructure. The NITI Aayog has now created the National Monetisation Pipeline (NMP Volumes I & II) (“NMP”) in respect of the brownfield core infrastructure assets. The NMP is in furtherance of the Government of India’s (“Government”) strategic divestment policy, which aims to limit Government’s presence to only a select identified sectors with the rest to be handed to private players.


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Supreme court draws lakshman rekha on powers of a court under section 34: no power to modify an award

  1. The Supreme Court handed down a significant judgment[1] on the scope of power of a Court hearing a challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The Supreme Court reiterated that there is no power under Section 34 to modify or vary an arbitral award.


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 Toll Operate and Transfer model - NHAI

With a view to monetise the operational national highways, the National Highway Authority of India (NHAI) introduced the Toll Operate and Transfer (TOT) model for partnership with private developers in the road sector. Under this model, NHAI passes on the toll collection rights and operation and maintenance obligations for 30 years to the private developer against payment of upfront, one-time, lump sum concession fees quoted by the private developer as part of the comprehensive bidding process. Projects under this model are awarded as a bundle of operational national highways, which allows the investor to offset the risks of one project against another. Since existing and operational roads are auctioned under the TOT model, it does not need developers with construction skills to participate.
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