Pension body lays down terms for building of new highways | india | Hindustan Times
Today in New Delhi, India
Feb 26, 2017-Sunday
New Delhi
  • Humidity
  • Wind

Pension body lays down terms for building of new highways

india Updated: Feb 15, 2015 00:22 IST
Moushumi Das Gupta
Moushumi Das Gupta
Hindustan Times
highways ministry

At a time when the highways ministry is eyeing pension funds parked with the Employees’ Provident Fund Organisation to finance its ambitious plan to build 20,000km in the next four years, the EPFO has made it clear that it wants a higher rate of return on the funds the ministry wants to borrow.

KK Jalan, Central Provident Fund commissioner told HT, “Nothing has been finalised yet. We’re asking the highways ministry to give us 10-15 basis points more than a Public Sector Undertaking bond rate which presently is in the range of 8.40% to 8.50%. It should be a win-win situation for both the EPFO and the ministry. This is the people’s money and I’m just a trustee. Unless there is a good return on the investment we can’t agree.”

The EPFO holds retirement savings of over 5 crore employees across India and has a pension corpus of about Rs 8 lakh crore. With private investment in the highways sector drying up, the road ministry has been in informal talks with EPFO to finance its highway building program.

The EFPO officials said that a formal approval to borrow the pension fund corpus would also depend on the security the ministry offers to EPFO in lieu of pension money it wants to borrow. At present, there is a lack of clarity on this issue. The EPFO wants the government to stand guarantee.

Sources said the highways ministry, in informal talks with the EPFO, offered toll revenues as collateral in lieu of the pension money that the National Highways Authority of India proposes to borrow. “The ministry will have to specify in what form the sovereign guarantee will be offered. For EPFO, portfolio managers would have to decide. If they are satisfied, we will go ahead,” Jalan added.