Government to monetise Rs 6,000 crore GAIL pipelines through InvIT
NEW DELHI: The oil ministry is eyeing the InvIT (Infrastructure Investment Trust) the route to monetise pipelines worth about Rs 6,000 crore built by India’s largest gas utility GAIL, charting a new course for raising funds for the government as the pandemic spooks big-ticket disinvestments such as of Bharat Petroleum.
Discussions on InvIT are on in the ministry in parallel to preparations for carving GAIL’s countrywide gas pipeline network into a fully-owned subsidiary. The ministry may seek Cabinet approval, although technically the GAIL board can decide to divest stake in pipelines through InvIT.
The Dabhol-Bengaluru and the Dahej-Uran-Panvel pipelines will be the first to be monetised. “There could be gradual dilution, say in tranches of 10-20% stake, to begin with, but GAIL will retain majority stake,” one official said.
GAIL will be the second state-run entity to dilute stake in projects through InvIT. The power ministry had in September 2020 secured Cabinet approval for PowerGrid to monetise transmission lines worth Rs 7,146 crore via InvIT.
Under the InvIT route, the parent company gets the proceeds and the government makes money through capital gains tax etc. In case of public sector projects, the government, as the owner, can additionally demand higher dividend from the parent.
