The Hindu Business Line : ‘Kochi Port needs financial discipline to tackle eroding revenues’

Kochi, May 3 The Cochin Port Trust is badly in need of urgent measures in ensuring strict financial discipline at all levels, if it wants to counter the present crisis of eroding revenues, the Port Trust Chairman, Mr N. Ramachandran, said.

The year 2008-09 was a bad year for the port, he said adding, that the global recession and its impact on both imports and exports through the port has hit revenues badly. “Adding to the woes are the intermittent strikes,” he said.

Handling of crude import through single-point mooring system, as it is at present has resulted in a revenue decline of Rs 45 crore, he said in his analysis of the port’s functioning in “Cochin Saga”, the monthly newsletter of the port. The drop in the volume of crude in the wake of the economic slowdown across the globe has also adversely affected revenues of the port.

But it was a matter of grave concern that expenditure had increased as against depleting revenues he said adding, that only through immediate and strong financial measures aimed at curtailing expenditure at all levels, the port can regain its financial health.

Even the IGPTL, which handles the container cargo, could not expect to contribute to the revenue of the port due to the aggravating recession in the maritime industry and trade.

Due to the slowdown in the manufacturing sector as a whole, there is a big drop in the bulk/ break bulk cargo, which is being handled exclusively by the port. The port could handle only 1.50 tonnes of import cargo in 2008-09, he said.

According to him for a work which fetches Rs 100, the expenses should be limited to at least Rs 80 and at least Rs 20 should be saved as margin in the case of any establishment. Also spending towards salary of the employees has to be limited to at least 30 per cent of the total revenues.

But in the case of the Cochin Port, as much as 70 per cent is spent on salary, and the port’s total expenses have touched 110 per cent of the total revenue in the last fiscal. “This is a grave situation wherein expenditure at all levels has no relation to the actual revenue being earned,” he said.

Just 20 per cent of the port’s cargo handling capacity is being carried out by double the number of employees normally required for the same. Despite this, the port is paying as much as Rs 8 crore as over time, which he said was a typical example of financial indiscipline. The port’s financial ill health could not be justified before others when all other 11 ports in the country are doing comparatively better, he added. There was an urgent need to resort to a 20 per cent cut in expenditure in view of the serious financial situation, he said.

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