The government is likely to kick off its ambitious Rs 6 lakh crore monetisation programme by leasing out more than 2,229 km of gas pipelines of state-owned natural gas company GAIL (India) Limited to the private sector, reported Livemint, citing a person directly aware of the development.

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In totality, the centre plans to monetise 8,154 km of GAIL pipelines.

Investment advisers for the proposed transaction are already being appointed by the centre, said the report, adding that several domestic and foreign investment banks have submitted initial interests.

For this purpose, the government will float an infrastructure investment trust (InvIT), a collective investment vehicle, to help investors put in funds and pocket a portion of the income as returns.

The decision to monetise GAIL pipelines was taken as they have the strongest demand from private investors at the moment, the report added.

According to Niti Aayog, GAIL has an existing gas pipeline network of 13,389km, with a capacity of 204 million standard cubic metres per day (mmscmd).

“In the natural gas transmission sector, there is a precedence of InvIT-based structure, when India Infrastructure Trust, an infrastructure investment trust sponsored by Brookfield, took over 100% ownership of 1,375-km-long Kakinada to Bharuch natural gas pipeline from a private sponsor for a period of 20 years against an upfront consideration,” Niti Aayog said.

After monetisation of GAIL pipelines, the government is likely to lease out National Optical Fibre Network, also known as BharatNet, and the power transmission lines, said the report.

The four-year NMP, worth an estimated Rs 6 lakh crore, aims to unlock value in brownfield projects by engaging the private sector. The private sector will be given revenue rights in government entities but not their ownership. The funds so generated will finance the National Infrastructure Pipeline that envisages an infrastructure investment of Rs 111 lakh crore over five years (2020-25).