• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books
• Gallery

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Mamuni Das

New Delhi, Sept. 11 Major ports may be allowed to invest their surplus of over Rs 12,000 crore in the equities of public sector undertakings in case the ports do not have any immediate need for funds.

This is one of the recommendations of an internal committee of the Shipping Ministry. A final call on the issue is to be taken by the Shipping Ministry in consultation with the Finance Ministry.

As on April 1, 2008, major ports had over Rs 12,000 crore of cash surplus, according to official data. But, they also had significant outstanding loans and investment requirement.

Major ports are governed by the Central Government.

Currently, there are guidelines for major port trust investments in national banks, inter-corporate loans, provident funds, superannuation funds, amongst others.

Port trusts are not encouraged to invest in equities as their primary objective, according to the Major Port Trust Act, is to plough back the funds into port development.

“But now there is a need for a re-look as the idea is to encourage major port trusts to function as independent profit centres.

That is how other competing ports are functioning,” explained a committee member.

Currently, the major ports have no incentives for maximising profits. “The surplus earned by a major port is not a parameter used to judge its performance,” he explained.

It is in this context that the committee headed by Mr Vijay Chhibber, Additional Secretary and Financial Advisor, Ministry of Shipping, suggested that “ports may be allowed to invest in some secured equities of public sector enterprises if the funds are not required immediately for port development”.

The committee also said that the ports could be allowed to invest in other port companies provided a detailed appraisal of the target company’s financial worth is made by the ‘finance wing’ of the investing port.

More Stories on : Shipping/Ports | Investments | Stocks | PSU

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line