"The committee also gave approval to freezing of the liability on account of government's loans, interest thereon and penal interest @ 0.25 per cent as on March 31, 2016, amounting to Rs 557.16 crore. The CCEA further approved the rescheduling of repayment of the amount commencing from 2018-19," said the cabinet statement.
According to the Cabinet, the Cochin Port Trust availed of loans for various developmental activities from the government amounting to Rs 168.15 crore between 1936-37 and 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 move comes against the backdrop of a series of steps taken by the Cochin Port to improve its financial condition, apart from the measures ordered by the government, such as ban on recruitments and stop to vehicle purchases.
"With these recent initiatives taken by the Cochin Port authorities, several income streams, long awaited by the Port, are now beginning to bear fruit. It will improve the financial status of the port in future and its ability to repay in future," said the statement.
