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Raja Simhan T. E.

Coal being unloaded at the Chennai Port... If coal movement stops, bringing pressure on revenues, will the port be at the `deep end'?

THE shifting of thermal coal to the Ennore Satellite port, and with iron ore to follow in a couple of years (either to Ennore or to any other port), the Chennai port may find itself in deep waters.

The Chennai Port Trust (ChPT) is under enormous pressure to find ways to compensate the loss of cargo and consequent loss of revenue. However, there is no idea of where the port is going to get such a huge volume — of about 15-20 million tones — in the next five-six years to compensate for this loss, said a senior ChPT official.

Adding to this worry for the ChPT is a plan under study by the Chennai Petroleum Corporation Limited (CPCL) to shift crude handling to Ennore Port from Chennai, he said.

"With thermal coal moving out, we are in the red. If CPCL also decides to shift out, then I think it would be better if the port is closed down since break bulk is our bread and butter," said the officer.

"The port would be nothing but a huge vacant real estate in a few years," he added.

Of the 21 berths in the port, six are for coal and dry bulk, three for oil and petroleum, three for containers and nine for general cargo.

The Chennai port lost about 9 million tones of thermal coal, and is about to lose 8 m.t. of iron ore in a few years.

If the CPCL plan goes through, the port would lose another 9 m.t. leaving the port with a deficit of 22-27 m.t. in about five years.

"With 16-17 m.t. of cargo handling, which is rock-bottom, the revenue would come down by a third from the present Rs 450 crore. We would not even be able to pay the employees' salary, which is about Rs 300 crore per annum," said the official.

While seeking a steep increase, of about 230 per cent, in the revision of tariff at the port with the Tariff Authority for Major Ports (TAMP), the ChPT said the net surplus of the port trust in 2000-01 declined to Rs 37.60 crore compared to Rs 145.21 crore the previous year.

As per the financial performance, the net surplus may drop further this fiscal. The situation is going to be worse from the next fiscal, the official said. More than the financials, the biggest and most immediate problem the port trust is going to face in the next couple of years would be with regard to workers.

With thermal coal moving out, a few hundred workers were left redundant, and another 600 workers will be jobless once iron ore handling is shifted out of the port.

"The redundant workforce is, and would be, the biggest worry for us. We do not know how to manage them," the official said.

The first VRS attracted less than 600 of the 11,000 employees, he added.

With the container terminal operations handed over to the P&O Ports, Australia, the container throughput in the port would increase to 4 lakh TEUs (twenty-foot equivalent units) this fiscal and about 5 lakh next year.

The container throughput will increase every year, giving the Centre's plan of making Chennai port a container hub on the East coast a big boost.

"The privatisation and the Centre's plan is a welcome decision, and will improve the port trust's financials to a certain extent.

However, such a step will not provide job opportunities to the workers. And in five years, after iron ore moving out, over half the workforce will be jobless," the official said.

The privatisation of the container terminal left about 550 workers redundant, the official added.

"With the recent VRS being less attractive, the port trust should perhaps adopt Kerala's policy and reduce the retirement age to 55, from the present 58. This would reduce the workforce sizeably and lower costs.

"Further, with the port trust going through a bad patch, measures such as availing of leave encashment and the accumulation of leave could be stopped temporarily till the situation improves," said the official.

With the future looking bleak, what are the options left for ChPT to attract cargo? Recently, there was a major cleaning campaign at the port, a step taken to bring back sensitive cargo such as foodgrains and agricultural products.

Assuming an inflow of 3-4 m.t. of such cargo, the quantity would still be low. Car shipments through the port seem to be improving every year, and if automobile manufacturers such as Hyundai, Ford, Toyota and Ashok Leyland increase their exports, Chennai could create the country's first Pure Car Carrier terminal. But this is a few years away, sources said. Hyundai is the only manufacturer exporting a sizeable volume of cars. The company has committed exports of over 25,000 cars per annum from 2001-02.

ChPT sources said that Ford has been exporting cars in CKD (completely knocked down) conditions in containers, and on an average about 300 containers moved every month through the port. Ashok Leyland exports trucks through the Jawaharlal Nehru Port (JNP) citing lack of Leyland. However, this again will take some time, sources said.

The Chennai port handles granite, kerb stones, cut and cobble stones, barites, feldspar and quartz, which require clean environment.

The volume of these cargoes through the port reduced in the last few years, and got diverted mainly to Tuticorin port because of coal dust.

These cargoes can be brought back, once the port becomes clean. Other cargoes such as project cargo of a few lakh tones, can also come to Chennai.

"All these are still on paper, and nothing of huge quantity, such as thermal coal, that can provide enough jobs for workers. There is no sign of such a huge quantity," said the official.

"Unfortunately, the workers are yet to realise the threat they are going to face in future," he added.

Change the skippers

A MAJOR consensus among Chennai port users, regardless of their activity, is the need for an immediate change in the top-level management at the Chennai Port Trust (ChPT).

"More professionals need to be brought in into the port trust, if the Chennai port is to survive. Not only the workers, but also port trust officials have not taken serious measure in the last few months to bring cargo into Chennai port," according to users.

The port trust should look at bringing back such cargo, as timber log that it lost to such ports as Tuticorin. For this, there should be efficiency and reduced tariff. "What is lacking in the port today is people with vision, aggression and strategy. It is high time the ChPT set a clear road map for the port, else it would be too late," the users said.

For instance, shifting coal handling to Ennore has been in the pipeline for more than five years. However, according to the users, no contingency plan was put in place to compensate the loss of cargo.

Despite being a major port, Chennai does not even have a deputy chairman to look after the port's day-to-day affairs — for about a year now, the port has been without a deputy chairman.

In major ports, the Chairman deals with macro issues and the Centre, and the deputy chairman the day-to-day affairs.

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