Bhubaneswar/New Delhi: The Union Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday gave its nod for waiving of 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.
PPT has to pay penalty @ 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.