The government announced a massive ambitious asset monetisation plan, a lease and buyback plan, which is expected to yield Rs 6 lakh crore over four years. The final touches of the scheme were put by the NITI Aayog. So, to explain some of the angles of the scheme in detail, CNBC-TV18 caught up with Dr. Rajiv Kumar, Vice Chairman, NITI Aayog.
Kumar said he was very pleased and amazed at the response received from the private sector towards the asset monetisation plan.
However, when asked whether we had done the bandwidth and the homework a little quickly because when one looked at what happened to the privatisation of trains, which did not go through, while now we were attempting to do much more. So were they confident that the bandwidth was there to get those agreements quickly because the private train issue had left a bit of uncertainty? Kumar said that trains had not been the best experience so far and that they had learned from that experience.
“There is a new minister in charge who is looking into it, in great detail. I want to assure you that within the line ministries combined with the NITI Aayog and other relevant ministries, there is sufficient bandwidth. Moreover, sufficient experience in the past to be able to design these adequately so that we get the private sector participation and interest,” he assured.
The other angle to focus on would be the public sector employees because ports were something we were just starting out with and we had not yet privatised them, and there was the extent of unionisation of workers and there could be a lot of problems which the private operators may have in terms of the public sector or publicly hired employees, even if they were not on the rolls. When asked if that angle was thought through or could we have a problem monetising, and if union problems were over because some of the infrastructure operators had raised these questions.
Kumar said, “Hopefully, things have changed in the last three decades and the unions are far more conscious, and they are far more responsible and are quite tuned to the national interest. So I'm not expecting at all irrational behaviour on the parts of the unions. Secondly, as again, our experience has shown the private operators and the workers and their employees do tend to get into reasonably good agreements among themselves, which is a win-win situation.”
“So, again, this conflictual and antagonistic sort of expectation that this will be the only outcome. And experience shows that it can be addressed quite reasonably and in a short time,” said Kumar.
When asked about the pricing of assets, giving reference to what the Australian Competition and Consumer Commissioner raised only a month ago - on July 30, he had said if we kept on raising the money for public goods, like highways, ports railway stations, then are we not pushing up the price of the economy itself, the cost of doing business won't impact productivity. Was this angle even discussed?
Kumar said, “It was of course discussed, the fact of the matter is that if these assets are managed and operated more efficiently, then the prices in fact would tend to come down rather than go up. And also the fact that their efficiency in use which is by operation and maintenance would also be better."
"The best insurance for that is of course, that we have an open competitive bidding system and all of these assets will be bid out, on very transparent, very well structured concessionaire agreements. We are hoping that we will get bids, which will in some sense be most competitive and the concessionaires will ensure that because of the way the concessions will be structured and the time period, and so on, and in the increase in traffic, etc., that the prices will remain as low as they can be,” he said adding that the apprehension of the Australian regulator for the Competition and Consumer Commission may not be borne out in the country, especially because we have learned on the job in the past, and we have noticed in the past experience, that the prices have not been a real factor in the monetisation of these assets.
Watch the accompanying video for the entire discussion.