Govt waives Rs 1,077-cr penal interest on loans to Paradip Port

The government today said it has waived Rs 1,077 crore penal interest on loans to Paradip Port Trust (PPT), one of the 12 major ports in the country.

The decision was taken by the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi.

The CCEA has given approval for Waiver of penal interest amounting to Rs 1,076.59 crore in respect of PPT as on 31.03.2017 and further accruals thereon till date of approval of waiver, Ministry of Shipping said in a statement.

It said PPT will pay penalty at 0.25 per cent of penal interest as on the date of approval of waiver of penal interest.

Also PPT will "start the re-payment of outstanding principal of Rs 387.74 crore and outstanding interest as on date of approval of the waiver and the re-payment is to be completed in two instalments in 2018-19 and 2019-20, the statement said.

PPT had availed Rs 642.69 crore of loan under different heads at different points of time beginning from 1967 to 2002 to finance its various infrastructure projects.

Each loan was to be repaid in 20 yearly installments with a five year moratorium period, the statement said adding, PPT was incurring losses up to the year 1987-88 and there was huge deficit in revenue account due to insufficient cargo.

As a result of which PPT could not start its repayment as per schedule, it said.

As on March 31, 2017 PPT had a total loan liability of Rs 1,743.69 crore (Rs 387.74 crore towards defaulted principal, Rs 279.36 crore towards interest and Rs 1076.59 crore towards penal interest).

Further, the Port has a future fund requirement of around Rs 6,695 crore for different upcoming developmental projects and employees' pension liabilities up to 2018-19, the statement said.

Therefore, the Port is not in a position to repay the total loan liability of Rs 1,743.69 crore.