The State Government has expressed its reservations over the Central Government’s proposal to monetise transmission assets for raising capital required for creation of assets.
In a letter addressed to the chief secretaries/energy secretaries and power utilities of States and Union Territories recently, the Union Power Ministry said the Centre had identified asset monetisation as an important financing option for creation of infrastructure, as it serves two critical objectives - unlocking value from public investment in infrastructure and tapping private sector flexibility in operations and management of infrastructure. Monetization of assets unlocks their value, eliminates their holding cost and enables scarce public funds to be deployed to new projects, thus fast-tracking new infrastructure creation.
The letter cited the example of Power Grid Corporation of lndia Limited, a Central Power Sector Enterprise, claiming that it had monetised more than ₹ 7700 crore in May 2021 by monetizing 5 of its transmission assets through lnfrastructure lnvestment Trust (lnvlT). Since States also have significant potential for monetisation of their transmission assets the Ministry of Power evolved a common framework and approach for transmission companies desirous of undertaking monetisation of their assets.
Senior officials of the State power utilities said the guiding principles suggested by the Union Ministry were akin to sale and buy back. “We will be the owners and need not invest on new lines. But this appears to be another step towards privatisation of the transmission network, which is with the government,” a senior official said.
Officials are of the view that the development is not in the interest of consumers availing power at subsidised costs. “They (private players) will utilise the network and paying consumers will be with them. Consumers availing subsidy, like farm sector which gets power free of cost in Telangana, will be left with the Government,” a senior official said.
This would mean that the burden on account of monetisation of transmission network would be both on the common consumers and the government which should pay cost as determined by the private firm which will be taking over the assets on Acquire, Operate, Maintain and Transfer basis.
