Centre waives Rs 1,077 crore penal interest on loans to Paradip Port

Odisha Uncategorized

Bhubaneswar/New Delhi, May 23, 2018: The Union Cabinet Committee on
Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday gave its nod
for waiving of Rs 1076.59 crore penal interest on Government Loans to Paradip
Port Trust (PPT).
As on March 31, 2017, the waiver of penal interest amounting
to Rs 1076.59 crore in respect of PPT and further accruals thereon till date of
approval of waiver.
As per the Cabinet decision, PPT has to pay penalty at 0.25%
of penal interest as on the date of approval of waiver of penal Interest. It 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 to
be completed in two instalments in 2018-19 and 2019-20.
Paradip Port Trust (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. PPT was incurring losses upto 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. As on March,
31 2017, PPT has a total loan liability of Rs 1743.69 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 upto 2018-19. Therefore, the Port is not in a position to repay the
total loan liability of Rs 1,743.69 crore.

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