Shipping Ministry issues new guidelines for improving treasury investment for Major Ports: Potential to increase Surplus at Ports by Rs 150 Cr
Shipping Ministry has issued fresh guidelines to all the major ports on the
investment of provident funds based on EPFO (Employees Provident Fund
Organization) guidelines from the Ministry of Labour and Employment in 2015,
and on the investment of surplus funds based on guidelines from the Department
of Public Enterprises (Ministry of Heavy Industries & Public Enterprises)
in 2017. The decision was taken after a detailed study of investment options
available and their performance in other public sector undertakings
new guidelines are expected to increase the returns of provident and surplus
funds by 1 to 1.5 percent across ports, adding around Rs 150 crore annually to
the current earning figures.
the new guidelines, many ports, including Kandla, Goa, JNPT, New Mangalore and
Visakhapatnam are all set to switch the investment pattern with higher rate of
return. The financial benefit estimated would show up in the books of accounts
of major ports from 2018–19.
investments at India’s 12 major ports─ Kandla, Mumbai Port Trust, JNPT, Goa,
New Mangalore, Cochin, Tuticorin, Chennai, Ennore, Vishakhapatnam, Paradip, and
Kolkata/Haldia─ are governed by Section 88 of the Major Ports Trust Act, 1963.
The Act mandates that investments pertaining to pension, provident and surplus
funds adhere to the guidelines issued from time to time by the Central
Government, i.e., the Ministry of Shipping or Ministry of Finance.
Ministry of Shipping has undertaken a diverse set of initiatives as part of its
drive to boost profitability across major Indian ports. One major initiative is
to improve the returns earned on treasury investments by the ports for pension,
provident and surplus funds.
all major ports, these funds add up to around Rs 33,000 crore, yielding interest
of around Rs 2,700 crore. Looking for ways to push this amount further, the
Ministry has realized an opportunity to improve returns by Rs 150 crore or more
through a strategic shift in its guidelines for provident and surplus funds.
per the most recent guidelines, major ports have been investing their provident
and surplus funds in the fixed deposits of nationalized banks, earning returns
in the range of 5.5 to 8 percent.
However, many PSUs have enjoyed significantly
better returns. For instance, ONGC earned 8.4 percent returns through Oil
Corporation of India and Government of India special bonds; RECL earned 10 to
11 percent through Tier I bonds of the UP Power Corporation Limited and SBI
bonds. Realizing the potential to earn higher returns, the Ministry of Shipping
has evaluated its recommended investment pattern in comparison to the
frameworks followed by other PSUs and government bodies.