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Slashing overtime payout and controlling medical reimbursements have contributed to Chennai port reporting a modest net operating surplus of ₹5 crore in 2014-15 against a net operating loss of ₹174 crore in the previous financial year.
Chennai port’s turnaround was the most significant positive trend witnessed among all the major ports last year though most of them have improved their financial performance, according to government data.
Financial trouble The Chennai port has been facing a huge financial trouble in the last three years due to the shifting of coal and iron ore to the nearby Kamarajar port in Ennore. This is due to an order in May 2011 by the Madras High Court that prohibited the Chennai port handling dusty cargo to curb pollution in the city.
Atulya Mishra, Chairman, Chennai Port Trust, attributed the turnaround to a substantial reduction in over time allowance paid to employees and also a drop in medical expenses. These two were major expenses every year, he told BusinessLine .
Over time payment reduced to ₹14 crore in 2014-15 as against ₹30 crore in the previous year and ₹71 crore two years ago.
Similarly, medical expenses was reduced to ₹13 crore from ₹26 crore in the previous year and ₹40 crore two years ago. “We told employees to use our own hospital than corporate hospitals,” he said.
Port sector growth Last year, the port witnessed a 3 per cent growth in cargo handled at 53 million tonnes. The loss of coal and iron ore is slowly being compensated by high value cargoes like project cargo, he said.
Kamarajar port in Ennore reported a 3 per cent increase in net operating surplus to ₹330 crore (₹321 crore) and VO Chidambaranar port in Tuticorin reported a 17 per cent in net operating surplus to ₹145 crore (₹124 crore), says data.
On growth of all the ports, K Ravichandran, Senior Vice-President, ICRA, who tracks the port sector, said it reflects the pick up in cargo growth in 2014-15 after two years of negative growth (FY12 and FY13) and one year of marginal positive growth in FY14 (1.8 per cent).
Major ports have also been helped by the revenue share income from the private terminals set up under public-private-partnership.
Going ahead, the partial freedom given to these ports to fix tariff in line with market trends, can also be a key trigger for some improvement in their profits, he said.
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