The finance ministry is scouting for consultancy firms for assistance in selling land and building assets of public sector companies as it works towards achieving the stiff sell-off target of Rs 90,000 crore for 2019-20. The Department of Investment and Public Asset Management (DIPAM) has floated a Request for Empanelment(RFE) to empanel international property consultancy firms or any other firms engaged in transaction advisory services, asset monetisation or project management. The firms would assist DIPAM in formulating monetisation strategy with respect to land and building assets, conducting techno-economic feasibility studies of each of the assets, providing end-to-end transaction advisory services and ensuring completion of transactions.
"A major portion of the .... (non-core) government assets is in the form of land and buildings, for the monetisation of which this RFE is being floated," DIPAM said. The non-core assets could be categorised broadly into land and buildings, brownfield operational assets such as pipelines, roads, mobile towers, electricity transmission lines.
It could also include financial assets, like equity shares, debt securities, other hybrid/structured finance asset units and other miscellaneous assets. "Many of the assets are sub-optimally utilised and can be appropriately monetised to create greater financial leverage and value for the companies and the government, being the shareholder. Government intends to monetise select non-core and other assets owned by CPSEs/ PSUs/ other government organisations using appropriate model," DIPAM said.
The consultancy firms would be required to prepare feasibility reports for each of the identified assets, assist in finalising the model for monetisation, in conducting the bid process and preparing the bid document. Firms that have handled at least 5 transaction advisory projects in the last 10 years with respect to monetisation of land and building or having experience in ReIT listing can apply.
Also, entities -- fulfilling the same experience criteria -- regarding monetisation of property assets of reputed public/ private organisations or public private partnership transactions would be eligible to apply. The eligible firms would be required to submit their bids by July 1 and the selected ones would be engaged by DIPAM initially for 1 year, which can be extended for a period of 2 years.
As per the guidelines framed by DIPAM, an inter-ministerial group chaired by the secretary of DIPAM will identify the non-core assets of CPSEs on its own and also on the basis of recommendations of Niti Aayog. The final call, however, will be taken by the finance minister-headed panel. The amount raised through sale of non-core assets would form part of the disinvestment proceeds. The government is targeting to raise Rs 90,000 crore through CPSE disinvestment in current financial year, up from Rs 85,000 crore mopped up in the previous year.
So far this fiscal, the government has raised Rs 2,350.25 crore from disinvestment.