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Mumbai port to offer voluntary exit option to cut wage costs

N. K. Kurup
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Port expects 3,000 employees to opt for the scheme

Weighed down: Cargo being loaded at the Mumbai port on Tuesday. — Paul Noronha
Weighed down: Cargo being loaded at the Mumbai port on Tuesday. — Paul Noronha

Mumbai port hopes to cut its labour force by 3,000 through a voluntary retirement scheme.

The VRS , to be approved by the Government, would entail an outgo of about Rs 400 crore but the port stands to save Rs 150 crore yearly in wage bills, a port official said.

The country’s oldest port has 16,000 employees, more than double the number it needs to handle the current level of cargo traffic. Besides, the high average age — 52 years — of its workforce is considered a negative factor in terms of productivity norms, the official said.

According to the proposed VRS, employees will be offered either one-and-half month’s salary for every completed year of service or full salary for the remaining period, whichever is lower.

Unions oppose move

The Board of Trustees recently approved the scheme.

Two trustees representing the labour unions opposed the VRS stating that the terms were not attractive.

The VRS is part of the management’s efforts to revive Mumbai port, which once was the country’s premier port.

Among the major ports, Mumbai has the highest number of employees and the wage bill works out to more than 75 per cent of the port’s operating cost.

Neighbouring Jawaharlal Nehru port employs only 1,600 people. A union official, however, said JN Port and Mumbai cannot be compared as JNPT handles only containers.

In the past, the Mumbai port managed to cut its employee strength by over 7,000 through two VRS — one in 2001 (6,081) and the other in 2004 (1,222).

Port officials expect that at least 3,000 employees will opt for the scheme now.

However, there are apprehensions on how the Shipping Ministry would view the proposal. Even after the scheme, the port would still have surplus employees. On the other hand, the management may want to recruit fresh hands to address the changing nature of the cargo traffic and the port’s own operations. The Port Trust definitely needs more flexibility in these matters, he felt.

Last fiscal, the Mumbai port handled 56.19 million tonnes of cargo, up three per cent over the previous year. This year, it is targeting 15 per cent growth.

kurup.nk@thehindu.co.in

(This article was published in the Business Line print edition dated August 8, 2012)
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