Chennai port’s request to avoid unhealthy competition with Kamarajar facility

The Chennai Port Trust (ChPT) has asked the Shipping Ministry to merge the Kamarajar Port at Ennore with it or bring it under ChPT’s control.

This is to offset the loss of cargo to Kamarajar port and avoid unhealthy competition between the two ports. ChPT, which is a stake holder in Kamarajar port, has also urged the Ministry to continue the business incentive for the diversion of cargo, as Kamarajar Port has not absorbed the surplus labour according to the directions of the Madras High Court.

These issues were taken up at the last board meeting while discussing the financial performance of ChPT for the current fiscal, said a port trust source who did not want to be identified.

Not feasible

An analyst tracking the shipping sector said such a proposal is not possible as the Kamarajar port is a corporate entity, while the Chennai Port is under a Trust. The only common thing is that both are major ports and controlled by the Shipping Ministry, he said.

The request comes in the wake of ChPT likely to report a loss of ₹196 crore in the current financial year against the earlier revised estimate of around ₹120 crore.

As against the targeted throughput of 54 million tonne (mt), the Chennai port is likely to handle 51 mt, resulting in reduction of ₹31 crore in operating income. ChPT expects operating income this fiscal likely to be ₹605 crore instead of ₹636 crore projected in the revised estimate of 2013-14, the source said.

High Court order

The Madras High Court ordered ChPT to stop handling coal and iron ore from October 1, 2011, and shift dirty cargoes to Kamarajar port.

To compensate the loss to ChPT, it was decided that Kamarajar Port Ltd will pay to ChPT a business incentive of half the revenue received from handling coal.

Last financial year, Kamarajar port paid ₹13.08 crore to ChPT.

On the other hand, operating expenditure for the current year is likely to be ₹628 crore, an increase of ₹41 crore over last year.

The official said ChPT had to make a provision of ₹30 crore towards wage revision, apart from the normal increase in salaries and wages, the source said.

(This article was published on February 28, 2014)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.