NMP 2.0 and Railways Monetisation
Background
National Monetisation Pipeline (NMP) was first launched in 2021 to unlock value from brownfield public assets.
NMP 2.0 (2024–30) is proposed as a ₹10 trillion pipeline, announced in the 2024–25 Budget.
Ministries are preparing their updated asset pipelines; final plan to be unveiled soon.
Railways in NMP 2.0
Railways target: ~₹2.5 trillion monetisation over FY26–FY30.
Earlier target for the same period was ~₹1.7 trillion → revised upwards by nearly 50 per cent.
Largest private-investment mobilisation in Railways to date.
Monetisation is through public–private partnership (PPP) models, mainly on revenue-sharing basis.
Objective: raise resources without selling ownership.
Key Asset Classes Identified for Monetisation
1. Gati Shakti Cargo Terminals
To be leased/developed under PPP for freight handling.
Focus on leveraging private logistics players.
2. Private-funded Freight Trains
New freight trains to be introduced through private capital.
Aim: increase rolling stock capacity and efficiency.
3. Station Redevelopment + Commercial Development
PPP-based redevelopment of major stations; proceeds depend on commercial real estate.
Example: Vijayawada Station under redevelopment in PPP mode.
High interest earlier from private developers (Adani, GMR, Godrej, Oberoi), but tenders scrapped due to SPV shutdown.
4. High-Value Land Parcels
Monetisation of prime land parcels for commercial/residential projects.
Examples:
Salt Golah, Kolkata
Sewa Nagar–Lodhi Colony, Delhi
Dedicated Freight Corridors (DFCs):
Value of Eastern + Western DFCs: ~₹1.24 trillion.
Initial internal discussions held; NITI Aayog acknowledges deliberations.
Railways’ official position: “no proposal under consideration as of now”.
Monetisation potential depends on:
Private-sector appetite,
Risk-allocation framework,
Expected valuation from government.
Significance of NMP 2.0 for Railways
Economic
Mobilises large private capital for infrastructure expansion.
Eases fiscal pressure on government budgets.
Enhances efficiency in operations (cargo, stations, land use).
Governance
Aligns with PM Gati Shakti National Master Plan.
Encourages multi-modal connectivity.
Challenges
Risk-sharing frameworks still weak.
Past PPP failures create investor caution.
Monetising DFCs is complex due to operational risk and revenue variability.
Land monetisation often faces local resistance and regulatory hurdles.
Prelims Practice MCQs
Q. Under NMP 2.0, which of the following assets has been explicitly identified by Railways for monetisation?
Gati Shakti Cargo Terminals
New freight trains through private funding
Eastern and Western Dedicated Freight Corridors
High-value land parcels around major cities
Select the correct answer:
a) 1, 2 and 4 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2, 3 and 4
Answer: a)
Explanation: DFCs are being discussed internally but Railways officially states there is no proposal under consideration yet. The others are explicitly part of NMP 2.0.
Q. Regarding NMP 2.0, which of the following statements is correct?
a) It focuses on greenfield creation of assets using private capital.
b) It involves complete privatisation of railway infrastructure.
c) It leverages brownfield operational assets through PPP and revenue-sharing.
d) It is limited to road and telecom sectors.
Answer: c)
Explanation: Monetisation is about unlocking brownfield asset value via PPP, without selling ownership.