New Delhi The Department of Public Enterprises (DPE), now under the Ministry of Finance, will lead the government’s monetization drive of non-core assets such as land and buildings of Central Public Sector Enterprises through a Special Purpose Vehicle (SPV), the department. Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said Mint in an interview. Pandey said the name of the SPV would be announced soon after the approval of the Union Cabinet.
In July this year, as part of the restructuring ahead of the cabinet expansion, DPE, which was part of the Ministry of Heavy Industries and Public Enterprises, was made the sixth department of the Finance Ministry. “There is a non-core asset management framework that was started by DIPAM. Now that DPE is part of the Finance Ministry, the Union Finance Minister (Nirmala Sitharaman) has decided that DPE can handle the sale of non-core assets,” Pandey pointed out. Mint.
In November, 2020, DIPAM had signed an agreement with the World Bank for advisory services on non-core asset monetization. The World Bank Advisory Project, which was approved by the Finance Minister, aims to analyze public asset monetization in India and its institutional and business model with international best practices as well as capacity building for the development and implementation of operational guidelines. was to support. The Finance Ministry said, “It is expected that this project will facilitate and accelerate the non-core asset monetization process and help unlock the value of these untapped/moderately used assets, including further investments.” and has the potential to substantially increase financial resources for development.” said.
Pandey said the sale of Air India land and buildings under the SPV would be done by the DPE. “We are talking about non-core assets like MTNL, BSNL properties which may have to be sold. If we are disinvesting BEML, we will do demerger and need to sell those non-core assets. The part that DIPAM was doing earlier, now he will do DPE.
When asked whether the size of non-core assets can be compared with those of prime assets for which the government has set a target ₹6 trillion by FY25, Pandey said it will grow over time.
“That is why we have announced an SPV to do this, as many such non-core properties can be identified. For example, the land of a company that is going to be closed may come. The SPV can also manage the sale of land directly or without changing the title. The SPV can help them do this with a management fee.”
Pandey said the SPV is in the conceptual stage. “First you have to set up a company and then recruit competent people who can manage it. It is a medium to long term project. The recruitment process takes two to three months. However, it will be a very important tool for the next five to ten years as more and more land is identified. Today no one is touching the surplus land.”
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