Financial Daily from THE HINDU group of publications
Monday, May 06, 2002
Columns - On the move
CIWTC: Waiting for a revival wave
Pusher tugs under construction at the Raja Bagan dockyard of CIWTC... The revival package initiated by the Shipping Ministry will help the dockyard complete the unfinished construction of six vessels.
A WHIFF of fresh air appears to be sweeping through the corridors of the ailing Central Inland Water Transport Corporation (CIWTC), the public sector river transport company under the administrative control of the Shipping Ministry. After several years, both the management and employees are hoping to see the light at the end of the tunnel.
The optimism is not without reason: The Shipping Ministry, with its present accent on the promotion of inland water transportation as the economic as well as eco-friendly mode, has initiated several steps to turn CIWTC around. A revival package worth more than Rs 100 crore has been sanctioned and an accumulated loss of over Rs 400 crore has been written off. Another Rs 200-crore of write-off is likely.
The Cabinet cleared the revival package for CIWTC last June but the first instalment of the Government fund became available only recently. The 2001-02 Budget did not provide anything on this head. However, the management's pleading with the Ministry yielded results, with the Government having provided Rs 37 crore about a month ago.
Of this, about Rs 20 crore have been spent so far largely on meeting the statutory liabilities, such as the dues to the Provident Fund Commissioner (Rs 5.7 crore), arrear payments in respect of wage revisions to both existing and retired employees (about Rs 5 crore), payments of such terminal dues as gratuity and leave salaries to those retired in past two to three years (over Rs 4 crore) and VRS payment (about Rs 4 crore).
The revival package stipulates pruning of workforce from the present more than 2,000 to 1,400 within the next three years. This may not be too ambitious a target. Of the targeted reduction of about 600, an estimated 200 will go by the normal retirement process. Shedding the balance workforce of 400 over three years, or roughly 140 a year or around 12 people a month may not be difficult to achieve, if the current trend is any indication. Sixty employees each in February and March opted for VRS, with another 30 in April. VRS in CIWTC was introduced in 1993 and a total of 1350 employees have opted for it since then.
The next development has been the move initiated to boost the cargo carrying capacity. CIWTC has a fleet of 100 odd vessels, of which only about 55 are in operational condition. It is felt that at any point of time, at least 70-75 vessels should be ready for voyage. The management, therefore, has identified about 20 vessels for repair eight to nine tugs and the balance self-propelled as well as dumb barges. An estimated Rs 13 crore is to be spent to bring them back into operation.
While the repair work of some vessels will be undertaken in CIWTC's own ship-building and repairing unit, Rajabagan Dockyard, about half a dozen small boat-builders and repairers with yards located along the Hooghly river too have been identified for the purpose.
It might be noted that the fund obtained under the revival package will also help the Rajabagan Dockyard complete the unfinished construction of six vessels for which orders were placed in the Seventh and Eighth Plans.
However, the most vital issue still to be resolved is how to get cargo support for the river services. In 2001-02, only 70,000 tonnes of cargo were handled against 2.5 lakh tonnes a few years ago. The management has set a traffic target of two lakh tonnes for this fiscal in the hope of boosting throughput through several measures.
Most customers of CIWTC insist on round-the-year and round-the-clock service. That is not possible now.
The navigability along the vast stretches of the National Waterway No. 1 (NW 1) and NW 2 is so poor that even the barges requiring on an average two-metre draft cannot be operated throughout the year. This calls for dredging and bundalling. IWAI, it is hoped, will do the needful. Next, the night navigation is not possible now. The large-scale pilferage of the lighted buoys along the navigable channels particularly in NW1 has rendered night navigation a distant dream. CIWTC has taken up the matter with the authorities concerned but with little effect so far.
Third, the creation of handling facilities and the construction of jetties. In this respect also, CIWTC has to depend on IWAI. No wonder, the recent MoU between IWAI and CIWTC underscores greater cooperation between the organisations.
However, there are several other problems that need to be tackled properly before CIWTC can really hope to achieve a breakthrough. For instance, nearly 400 contract workers, backed by the port-based mafia, hold CIWTC to ransom. These workers will not allow any of the CIWTC vessels to be handled outside the TT Shed in the Kolkata dock system.
For instance, the Food Corporation India, sometime ago, wanted to have the vessels loaded at OJM Jetty for exporting wheat to Bangladesh. However, that was not possible because of the stiff resistance put up by the workers. FCI, therefore, made alternative arrangements. The matter was taken up with the appropriate authorities but with no result.
Sometimes, the customer would demand too much from CIWTC. For example, a cement company keen to move by barges about 1,500 tonnes of cement every month from Kolkata to Assam insisted on paying only the freight, and nothing else. It wanted CIWTC to take care of various handling other costs. Worse, it wanted to use the CIWTC vessel as floating storage at the unloading point as long as it needed.
About a year ago, CIWTC wanted to lease out some of its vessels. A few private river transport companies formed a cartel among themselves and quoted "unbelievably low rates". Even a private bus could not be acquired on charter at that rate, it is pointed out. It is pity that everybody wants to fleece an ailing government organisation.
For a long time, the lighterage operation for Kolkata port at both Diamond Harbour and Saugor Anchorage accounted for the bulk of CIWTC's traffic and, therefore, revenue. However, the port authorities have stopped such operation, dealing the CIWTC a heavy blow.
Finally, only one-way cargo inducement on the trade routes to Bangladesh and Assam from Kolkata/Haldia renders CIWTC's services unviable. There is hardly any cargo in the opposite direction, that is, from Bangladesh or Assam to Kolkata/Haldia. This pushes up the cost.
Right now the rate is around Rs 700 per tonne, which is very low. Last year, the Bangladesh IWT authorities insisted on 57 per cent hike in charges, perhaps rightly so. But where is the cargo? CIWTC's sickness is, thus, not entirely of its own making.
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