The Hindu Business Line : `Rationalisation of tariffs' put wind in KoPT sails

We offered massive tariff concessions for items with negligible throughput. This sent the message that the port meant business and a lot of interest was generated in the trade. — DR A. K. CHANDA, CHAIRMAN. KOLKATA PORT TRUST

Dr A. K. Chanda, a 1976 batch IAS officer belonging to the West Bengal cadre, joined the Kolkata Port Trust as its Chairman in June 2002. In an interview to Business Line recently, Dr Chanda discussed at length various issues facing the country's oldest port.

How would you describe your experience the past four years?

You may call it a period of relentless effort to turn around a much-maligned port and the effort is still on.

Could you explain a little?

When I joined, the Kolkata Dock System (KDS), one of the two dock systems of the Kolkata port — the other being Haldia dock — had been written off. In fact, Kidderpore Dock II under KDS was officially closed and Kidderpore Dock I virtually abandoned. Then there was a host of problems such as huge arrears on pension and wage accounts, and therefore, an unhappy workforce; low productivity; obsolete equipment; poor navigability of the Hooghly river; and as a cumulative effect of all this a high transaction cost. The list can be fairly long.

How did you handle all these?

Top priority was accorded to increasing revenues. But, then, it was a Hobson's choice. If you revised the tariffs upwards to earn more revenues, the KDS, already an expensive dock system, would become even more costlier. If the tariffs were lowered, the trade would be happy but the port's income would suffer, at least for some time. So, we started with rationalisation of tariffs.

We looked at the various types of commodities and the volumes handled at the KDS and offered massive tariff concessions for those items for which throughputs were either negligible or nil. We achieved two objectives: First, the revenue loss was almost nil but, more important, we sent the message across that the port authorities meant business and a lot of interest was generated among the trade.

You announced massive rate concessions for container traffic at the KDS, didn't you?

In respect of container traffic, the KDS has a unique system. Unlike other ports where box rates are charged, here we've commodity-specific rates. We found there were 70 types of commodities handled in containers with as many rates. We rationalised the rates of 55. We constituted several groups of port officers, such as trade relations group, marketing group, customer relations group and the business development group. While the first three teams concentrated on how to step up revenue earning through our existing operations, the last was asked to explore new non-cargo related opportunities.

Any success...

With some success.

How?

You know that Kolkata, like Mumbai, is an old port with huge land area. However, our earning from real-estate was negligible compared to the size of property we have. A special drive pushed up our earnings from Rs 18 crore to about Rs 120 crore annually and it will increase further.

Also, the KDS has five dry docks — three at Kidderpore and two at the Netaji Subhas dock. We've revamped their operation and rationalised the rates in such a way that outside vessels (that is, not belonging to the port) queue up for repairs. The experiment has been a success. We've completely renovated our hospital. We have appointed eminent medical practitioners on contract, the facilities have been augmented and upgraded and we're planning to throw the hospital open to general public on payment. The port employees, of course, will continue to get their treatment free of cost. We've plans to start training programmes for nurses and para-medical staff.

Our hydraulic study department has started undertaking consultancy work for various government agencies. We want the marine and port engineering departments too to undertake similar consultancy services.

There have been reports that the KoPT is planning to promote cruise in the Hooghly river as also along the coast. Is it so?

Absolutely, and why not? After all, the Hooghly river, as also the east coast, holds the promise of cruise-tourism. We've invited global bids. We've allotted a plot of land on the waterfront in the KDS to a private river transport company to set up a terminal for small cruise boats.

What about your rail operations? Earlier, there were plans to give it up altogether...

I will not comment on the earlier plan to close down the rail operation by the port. But we've now reversed the decision and perhaps rightly so. In a megapolis like Kolkata, there are limits to the road network. Only six per cent of the city area has arterial roads. In such a situation, relying on road to promote traffic for the port certainly cannot not be a step in the right direction. Besides, rail movement is any day cheaper than by road. But, then, the job of revamping the rail system has not been easy. Over long stretches, there were no lines; also the locomotives were in a bad shape. I got a lot of help from the Eastern Railway to revamp the system.

What about Haldia, your other dock system?

Haldia is the most vibrant dock of the Kolkata port; it is our mainstay, accounting for the bulk of the total volume of traffic handled by the port and, therefore, the large chunk of the revenue. The challenge there is to maintain the day-to-day operation in the most efficient manner. But, then, Haldia too has a problem.

What is that?

The problem of capacity constraint. The present berths are not enough to handle the projected growth of traffic at Haldia. We are, therefore, constructing two berths inside the dock and two outside, on the river front. With the commissioning of Paradip-Haldia crude pipeline Haldia will stand to lose a chunk of the crude traffic. We must attract new cargo to compensate the loss.

Are you happy with the level of productivity?

I am not unhappy at the level of improvement achieved in the past few years. There is no point blaming the workers for poor productivity. The labour must be aided with capital. The advantage of technology must be taken to improve their productivity. That is exactly what we are doing. We're installing new cranes, new handling equipment to improve productivity of our workers. All these would not have been possible without the excellent cooperation I have received from all sections of employees, particularly the unions.

What is your biggest issue?

I'll prefer to call it priority. The poor navigability of the Hooghly continues to be the major concern to the port authorities. Therefore, we've to move both southward and northward along the Hooghly river — southward for some deeper draught location closer to the sea and northward to exploit the opportunities for the IWT traffic. There is no dearth of business.