Public Assets Management

Madhya Pradesh

The Government of Madhya Pradesh has been facing issues in managing unutilized and underutilized assets. The issues are as below:

• Absence of proper database of Government Assets for identification of underutilized or unutilized assets 
• Lack of information of land available with the government leading to delays in implementation of development projects.
• Vacant government land parcels get encroached by land mafia and become subject to litigations.
• Absence of a policy for monetizing/managing of underutilized or unutilized assets 
• Reserve price fixation is a major constraint with scope of action getting questioned by decision makers in future
• Cumbersome task for a department to identify the unutilized assets all over the state, record them and arrange all the title related documents. Also this is not a priority agenda for any department.
• Large number of assets lying with the liquidators for want of a proper disposal mechanism.

• GoMP created a new department “Public Assets Management Department (PAM)” on 26/09/2020.
•  Subsequently, for meeting the objectives of department, the SPV was registered namely “Madhya Pradesh State Assets Mangement Company Limited” on 16/02/2022.
• An Apex Committee headed by Chief Secretary, GoMP has been formed for selection of the asset for monetization/management and fixing the reserve price in cases of monetization. It also recommends the highest bidder.
• Creation of web-based Module e.g. https://www.pam.mp.gov.in/  and www.pamportal.mp.gov.in for uploading of unutilised/underutilised assets with details like asset name, location, area, present land use
• Using “Tender cum e-Auction” module of GoMP e-tender portal (www.mptenders.gov.in) for disposal.
• Creation of the State Assets Register https://geoportal.mp.gov.in assetmapping_map/home.aspx# which brings all government assets under single platform which captures location, survey details, and images of government assets

The solutions have been selected due to the following reasons:

• A specific department has been created for addressing the issues of assets management across the districts/departments.
•  Management of assets is a specialised task for which a company with a variety of expertise has been formed. 
• The Apex committee has been created as an overarching body for deciding and issuing directions to concerned department for management/monetisation of assets.
• Web based repository www.pamportal.mp.gov.in  of unutilized/underutilized assets and a transparent tendering module. 
• State Assets Register as a single database of all government assets.

• The Nazul Nirvartan samiti at District/Division level identifies the assets for monetisation/management
• Nodal officers in various districts/departments have been provided with login credentials of PAM portal for uploading the asset
• PAM department shortlists the assets for monetization/management. Post examination of the feasibility of assets for management/monetisation, Principal Secretary, PAM has been authorised to archive the asset which can be then utilised by district administration at the district level
• Apex Committee selects the assets for the monetization/management and also fix the reserve price in cases of monetisation
• An application for change of land use is submitted by the company to Directorate, Town and Country Planning and standard operating procedures for fixing the timeline at each stage has been formulated
• For maximisation of asset value, the department does infrastructure development via construction of boundary walls, approach and internal roads. Large land pieces are split into appropriate sized parcels as per paying capacity of realtors of that area
• “Tender cum e-auction” module of GoMP (www.mptenders.gov.in) is used for disposal of assets. In this process, bidders submit two-cover bid i.e. technical bid (Cover-1) and financial Bid (Cover-2). The e-auction starts at fixed reserve price with bid increasing in multiples of 0.5% of the bid price. The financial bids are opened after the e-auction and the successful bidder is selected based on offering of highest price, which is discovered out of, either of the financial bid or price discovered through e-auction
• Apex Committee recommends the highest bidder and tender amount to cabinet
• Post approval from cabinet, Letter of Intent (LOI) is issued by the department. The successful bidder has to deposit 25% of total accepted bid amount as first Installment within 30 days, after issuance of LOI. Letter of Award (after receiving 25% of total accepted amount) is then issued to the successful bidder. Second installment of additional 25% is deposited by the successful bidder within 30 days of issuance of Letter of Award (LOA). Remaining 50% amount is to be deposited by the successful bidder within 60 days after receiving LOA.
• Execution of sale deed/registry in office of Sub-registrar after receiving 100% of Bid amount.

Challenges in implementation are as below:

• Unavailability of updated land records and expired leases
• Discovery of encumbrances in the midst of the tender process e.g. litigation over title of assets and encroachment
• Land use envisaged by the apex committee not getting approved by the Town and Country Planning Department
• Issues in site clearance e.g. removal of the trees situated within the asset or shifting of electrictity lines and actual available area
• Issues relating to payments of pending dues of the previous owner in case of assets under liquidation 
• Bidders are mostly property dealers who are looking for investors for partnership in the project. This results in their seeking extension of time for payments of installments which results in delay in payments. In some cases where the bidders fail, results in default in payment leading to cancellation of the tender

• Transferred ownership of leased land in favour of Government of Madhya Pradesh
• Senior Advocates are engaged to deal with title litigations with alacrity
• The Department takes on the responsibility for ensuring the land use changes and expediting the process.
• The Company diligently follows up for making the assets free from encroachments and ensures proper demarcation on the site.
• The Department facilitates in getting the NOC as well site clearance
  from concerned departments.
• The Company gives prompt responses to the grievances of the bidders and attempts expeditious resolution. 
• Site visits in conjunction with bidders and field funtionaries to facilitate resolution of the issues is conducted.

• Creation of a specific department and a company dedicated to the task only
• Progress review by the highest echleons of the Government
• Adoption of transparent “Tender cum e-Auction” module of GoMP e-tender portal (https://mptenders.gov.in/)
• Clear cut guidelines for Reserve price fixation
• Fixing timelines for landuse change

Some of the example of outcome leading to long term effects:

• Auctioning off plant & machinery as scrap under liquidation of MP OILFED made land of about 80 hectares available for Micro, Small and Medium Enterprise/Industry departments for industrial clusters which would result to boost local economy.
• Releasing mortgaged assets: Long standing issues pertaining to properties attached by EPFO and SBI on account of non-payment of dues were solved. The PAM department managed to get assets released worth Rs. 525 Cr lying with EPFO by paying the dues of Rs. 15 Cr approximately. One Time Settlement with SBI was done for dues amounting to Rs. 1000 Cr with a payment of Rs. 16.50 Cr
• A new scheme “Public Assets Management District Incentive Scheme” to incentivize districts by providing 25% of sale proceeds from disposal of assets for infrastructural developmental work in that district. This motivates districts to partner the efforts of the department in identifying unutilized/underutilized assets.assets for infrastructural developmental work in that district. This motivates districts to partner the efforts of the department in identifying unutilized/underutilized assets.
• The department has catalysed the thought process in political/ bureaucratic leadership regarding taking care of unutilised assets. So far 80 assets have been monetised and 60 assets reassigned to departments for management.
•  Monetisation of assets at an average of 1.6 times of reserve price.

The department has following achievements:

• Monetization of assets:

• Reassigning/Management of assets for long term developmental activities:

• Scheme for Special Assistance to States for Capital Expenditure:

M.P. has received performance incentives from Government of India under part VII of the “Scheme for Special Assistance to States for Capital Expenditure.” in the form of 50 year interest free loans. In FY 2021-22, Rs. 46 Cr has been received & the expected amount for FY 2022-23 is Rs. 250 Cr.

• Public Assets Management District Incentive Scheme:

In FY 2022-23, 15 Districts have been disbursed Rs. 48.06 Cr. under the scheme for long term infrastructure development.

The Project can be replicated in other States/UTs by taking the following measures:

• A specific Department/company needs to be created for management/monetisation of assets.
• A Policy for Fixation of Reserve Price needs to be formulated.
• Transparent “Tender cum e-auction” process needs to be followed.
• A web-based portal for allowing districts/departments to upload the identified assets for efficient management/monetisation.
• An empowered committee may be formed which selects the assets for management/monetisation and fixes the reserve price of the assets as per the guidelines.

• Parceling of land in appropriate sizes
• Government taking on the responsibility of land use change
• Providing proper access to the asset and shifting public utilities located within asset
• Making assets encroachment free leads to swift and speedy disposal
• Clear demarcation on the spot by the Government
• Prompt response to investors queries

• A web portal www.pamportal.mp.gov.in has been designed for uploading the unutilized/under-utilized assets by departments and districts. The portal captures asset name, location, area, valuation as per the collector guidelines, khasra no./sheet no., photographs, etc.
• Web based module www.pam.mp.gov.in is being created which provide details of live tenders, approved tenders and assets available for utilisation in government work.
• Use of “Tender cum e-auction” module of GoMP (www.mptenders.gov.in) for disposal of assets.
• State Asset register has been designed to bring all government assets under single platform.