Cabinet approves waiver of Rs 897 cr loan availed of by Cochin Port Trust

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval for waiver of penal interest on Government of India (GOI) loans availed of by Cochin Port Trust to the tune of Rs 897.23 crore.

The CCEA also gave its approval by freezing the liability on account of GoI loans, interest thereon and penal interest at 0.25 per cent as on March 31, 2016 amounting to Rs.557.16 crore (Rs.258.14 crore + Rs.281.45 crore + Rs.17.57 crore). The CCEA further approved the rescheduling of repayment of the amount frozen in 10 years commencing from 2018-19, according to a PIB release.

The Cochin Port Trust availed loans for various developmental activities from the Centre amounting to Rs 168.15 crore between1936-37 to 1994-95. Non-repayment of these loans has attracted penal interest to the tune of Rs 914.80 crore.

"The Port could not repay the loans since the projected revenue from the capital investment done was not sufficient to cover the interest component," the release stated.

The Cochin Port has undertaken remedial measures to improve its financial conditions, apart from the measures ordered by the Centre including freezing recruitment, stoppage of vehicle purchases and the like. Measures adopted by the Port include steps unprecedented in other major ports, like freezing of variable DA for all employees and dearness relief for pensioners, stoppage of HBA, conveyance advance, and LTC, stoppage of overtime posting for non-operating areas.

With these recent initiatives taken by the Cochin Port, several income streams, long awaited by the port, are now beginning to bear fruit and this would improve the financial status of the port in future and its ability to repay in future, said the release.

Cochin Port achieved Rs 70 crores of operational profit in the just concluded financial year, as agianst Rs 18.5 crore a year ago.