PM Modi Selling India’s Crown Jewels, NMP Designed to Create Monopoly: Rahul

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Narendra Modi and Rahul Gandhi. (File Photo: IANS)

NEW DELHI — A day after Union Finance Minister Nirmala Sitharaman unveiled the government’s four-year National Monetisation Pipeline (NMP) worth Rs 6 lakh crore, former Congress President Rahul Gandhi on Tuesday accused Prime Minister Narendra Modi of bringing the process of selling the “crown jewel” assets built by his party in last 70 years.

He also contended that the Congress is not opposing the privatisation process but “the entire NMP is designed to create a monopoly”.

Addressing a press conference at the party headquarters along with former Finance Minister P. Chidamabaram, Gandhi said: “The Prime Minister and the BJP said that the Congress had done nothing in last 70 years. There is a list here of all the assets that the Congress has helped build using the public money.”

“Now the Prime Minister is in the process of selling the crown jewels of this country.”

Listing out the sectors which are going to be privatised, Gandhi said that these are being sold and one can guess to whom it is going.

“And frankly, these will go to three to four people,” he said.

Announcing the measure on Monday, Sitharaman had said it is to unlock value in brownfield projects by engaging the private sector, transferring to them the rights but not the ownership in projects, and using the funds for infrastructure creation across the country.

But assailing the government, Gandhi said: “I want to tell the youths, your employment has been snatched, for farmers, three special farm laws have been made. And today I want to say what Prime Minister plans to give to his industrialist friends.”

This, he claimed, comprises 26,700 km of national highways worth Rs 1.6 lakh crore, Rs 1.5 lakh crore in railways with 400 railways stations, 150 private trains, railway tracks and warehouses. He further said that 42,300 circuit km of transmission network, 6,000 MW power generation, solar wind assets from NHPC, NTPC and NLC, and 8,000 km of national gas pipeline of GAIL are all going to be privatised.

Even the 4,000 km of petroleum pipeline, 2.8 lakh km of telecom assets of Bharat Net Fibre Netowrk, BSNL and MTNL towers, warehouses worth Rs 29,000 crore with a stroage space of 210 lakh metric tonne, 107 coal mines, 761 mineral blocks, 25 airports worth Rs 21,000 crore, ports worth Rs 13,000 crore along with 31 projects, and two national stadium worth Rs 11,000 are going to be gifted to few industrialists, he said.

Reiterating that these are going to be given to “only three to four people”, Gandhi said: “This is your future. Your future is being sold to these three four industrialists. It is reality.”

He, however, said that the Congress is not against privatisation.

“We had logic behind privatisation,” he said, adding that the industries, which were chronically loss-making and the companies with minimal market share were privatised.

“And the sectors where there were risk of private sector monopoly, we decided not to sell. But this entire scheme is designed to create monopoly,” he alleged.

“All the sectors that I have named are there to bring monopoly. We say do privatisation but not at the cost of loss to the country,” he said, claiming that when these assets are privatised or sold to private players, then there will very less employment opportunities.

“I had warned about Covid and you all made fun of me. When this starts your chances of getting employment will be less. The assets of India are being sold and it is an attack on your future,” he said, adding that the Prime Minister is not working for India but “for three or four people”. IANS

1 COMMENT

  1. As usual ,the Indian Media has been purchased or is just inept.I do not blame the Panwari Bania Indian Media.They have no domain expertise and they are cash starved – so they are easily conned and purchased.

    NMP is a privatisation and disinvestment,via an operating and/or financial lease.The purpose is NOT to raise funds – as else,the idle/surplus/loss making assets could have been quarantined, in a SPV and sold off,or a JV partner brought in.The purpose is NOT to improve efficiency,as else the assets could have been transferred to a toll operator on a pure O&M Contract (SO NO LEASE CHARGES),with a bonus for INCREMENTAL EFFICIENCY.

    The Purpose of the NMP,is also NOT to cut staff costs,as the GOI is the owner of the asset,and so,the staff cost is a sunk cost – who will remain a burden on the GOI,or take a VRS,or hopefully die over the lease tenor.

    The Purpose of the NMP,is NOT to increase bank credit,as banks would lend better to a SPV, which had ownership of the asset.W/o an asset, a bank will lend on Balance sheet and Guarantees of Promoters of the operating lessee – wherein THERE WILL NO MORTAGEABLE SECURITY.Banks cannot possess the GOI ASSET, if the lessee goes bust.Of Course,a new lessee can step in – but if the first lessor could not make a profit on the asset,the reasons for the losses,are beyond redemption.

    The lessors will obviously make a neat profit (for the NON-MANUFACTURING AND NON PRODUCTION ASSETS – like Roads,Hydro,Bridges,Stadiums etc.,) with the aid of bank leverage, and on the expiry of the lease period,will buy the asset – after a ICB.By then,the banks would have assessed,tested and appraised the technical and managerial competency of the lessor – and so.the Banks and PEs etc.,will easily fund the acquisition.In the alternate the GOI could takeover over the property and land developments (to collect the rentals etc.or do another lease of the same) by the lessor (after the lease expiry) , and just hand over the core toll asset to a ICB Buyer.

    The Manufacturing assets leased under the NMP,(like Thermal Power plants etc.) will become junk in 20 years and also technically obsolete,and so the GOI will have no use in its repossession – except to set up a refurbished plant and sell of the surplus land.In 20 years,the land used for the same manufacturing capacity will fall by at least 50%,and so that surplus land will be windfall to the GOI,and the GOI will be glad to let the lessor acquire the plant and take a bank loan to refurbish it.

    The 1st Purpose of the NMP,is to SELL the asset BUT BY NOT CALLING IT A SALE – in law.If they had sold the asset,they would receive a MUGH HIGHER Valuation – but that has a huge POLITICAL COST and the CONTINGENCIES OF TIME.

    The 2nd Purpose of the NMP,is to MONETISE THE LAND associated with the asset,w/o SELLING THE LAND,and outsourcing this SCAM,to a private person,so that the GOI is free of the taint and scams in the land monetisation.For example, in a toll road,the jackpot will come in the property development/promotion/adverisement/drive in theatres/malls etc.,on the land on the ROW of the Road,and other areas.If the GOI does it,there will be scams – and so,it is outsourced to the private party – who will make a killing,as his tenor is 25 years,and the GOI is getting a Pay down on Day 1 (with no comparable benchmark).The same applies to GOI stadiums,libraries,buildings,Railway stations…………………The core driver of the monetisation streams is the LAND (even for ports).

    The 3rd Purpose of the NMP,is to provide a risk free lending option to Indian Banks,as the Banks are lending to the GOI,VIA THE OPERATING LEASE LESSOR (as the bank will fund a part of the lease payment to the state).If the lessee defaults,some other lessor will step in.

    The 4th Purpose of the NMP,is to provide an option to the banks to BLOAT the Bank Balance Sheet,TO REDUCE THE NPA %

    The 5th Purpose of the NMP is to circulate credit across the supply chain of these revived moribund assets – in the hope that some money flows to the NPA entities – so that they repay the loans.

    The 6th Purpose of the NMP,is to boost the fiscal revenues of the GOI,as new business streams will be created across the supply chain – but more importantly,the leased assets
    were with the GOI,in non taxable units or loss making units.Now with these assets in a lessee entity – the lessee will run the assets to make a profit – and that will be taxed,w/o any tax shelters,as the assets were constructed some time ago.

    The 7th Purpose of the NMP is to use 5% of the Cash raised to do a VRS and kick out all the GOI staff on the leased assets – with an option to them,to ne hired by the lessee.

    If this Titanic sails,then next will be the surplus Military and CAPF land – which will be worth USD 100 Billion at the minimum

    In essence,a road or a port,post operations,can be run better by a private lessee ONLY BY CUTTING COSTS AND IMPROVING OPERATIONAL EFFICIENCIES.But this incremental PROFIT by the lessee cannot JUSTIFY the NMP UPFRONT PREMIUM.The PREMIUM IS justified ONLY by UNLOCKING THE POTENTIAL OF THE LAND COMMERCIALISATION AND PROPERTY DEVELOPMENT OF THE LAND AND PROPERTY USP, EMBEDDED IN THE GOI ASSET.

    The GOI may be able to Unlock the embedded land value,on its own – but that will come with scams – and so,it is OUTSOURCED -wherein the netas will pull all the strings – but the axe will fall on the lessee.

    Indian Duds do not realise that GOI does not care for GOI jobs,or Quotas in Jobs.There is no money for these fantasies.That India died with the Chaiwala as PM.dindooohindoo

    India is the ONLY Nation in the world,which HAS USED COVID as an OPPORTUNITY,to do an NMP,Privatise Ports,and raise GST and ED,on Fuels and Edible oils – for its fiscal management, which would have been UNTHINKABLE,IF COVID were not there !

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