PGCIL gets nod from Cabinet Committee on Economic Affairs for asset monetisation

The Cabinet Committee on Economic Affairs has given its nod to PGCIL to monetise transmission lines worth Rs 7,164 crore in the first phase via infrastructure investment trust in FY21, according to a government statement.

Based on the experience gained, further monetisation would be carried out in future, as per the directives and targets fixed by the Centre, the government added.

According to an office memorandum circulated recently, the government has asked Power Grid to monetise Rs 20,000 crore worth transmission lines in two phases.

The CCEA approved monetization of its tariff based competitive bidding (TBCB) assets held in existing Special Purpose Vehicle (SPVs). “Power Grid to monetize through InvIT, its other TBCB SPVs including those which are either under construction or shall be acquired by the company in future, as per the directives and targets fixed by the government,” according to the statement.

The proposed monetization will change the CPSE character of PGCIL’s SPVs.

“The approval would facilitate Power Grid to undertake asset monetization of its identified TBCB transmission assets through InvIT, so that the proceeds from the asset monetization could be utilized for fresh investment in the transmission network expansion and other capital schemes of the company,” it said. In the first block, the company would be able to monetize 5 TBCB assets of gross block of Rs 7,164 crore (as on September 2019), it added.

The Centre has identified a clutch of core assets of state-owned entities for monetisation, including pipelines of Indian Oil and GAIL and assorted assets of Indian Railways, Delhi and Kolkata Metro rail systems and Dedicated Rail Freight Corridor. Ministries of power, steel, mines and food, which have been asked earlier to identify potential assets to be monetised, are likely to apprise the core group of secretaries for asset monetisation (CGAM) of their plans on September 9.