April 05, 2002

    Shri Ved Prakash Goyal, Minister for Shipping, presented a cheque of Rs.255 crore to the Prime Minister, Shri Atal Bihari Vajpayee, here today on the occasion of National Maritime Day against repayment of the Government loan to the Shipping Corporation of India Ltd (SCI). With this SCI has repaid the entire debt owed by them to the Government of India. It may be noted that the SCI, which is under disinvestment, perhaps is the first Public Sector Enterprise to have repaid its entire Government debt.

    The SCI raised resources through suitable market transactions and from its own internal resources to pay back the Government loan. With the repayment of this loan, the Government would save about Rs.38 crore by way of interest differential subsidy which would, otherwise be required to be provided for in the budget.

    The Government has a scheme to support Indian Shipyards where any Indian ship owner which constructs a vessel at either Cochin Shipyard or Hindustan Shipyard is required to pay interest @ 9% per annum only and anything above is paid by the Government by way of interest subsidy. The SCI had also availed of this facility for some ships built at Indian shipyards. In the last two months, the SCI, taking advantage of the falling interest regime re-negotiated downwards the interest on two loans. That would mean a further saving to the Government on interest differential subsidy. On that basis the total saving to the Government would be about Rs.76 crore. Considering that total subsidy now required to be paid would be Rs.26 crore, the subsidy obligation of the Government has been cut to only one fourth.

    On one of the two loans a reduction had also been achieved earlier through refinancing by the SCI resulting into savings of about Rs.24 crore to the Government. Taking into account all these savings, the Government would save Rs.100 crore by way of savings on subsidy payment to SCI due to financial engineering.