Trustees of Chennai Port Trust (ChPT) have rejected the management’s proposal to introduce a slew of austerity measures to curtail the huge loss likely to be reported this year.
The trustees at a special board meeting on Monday felt the measures were mainly targeted at workers at the ‘lower level.’ They have sought a modified proposal to ensure a 20 per cent reduction in the port’s overall expenditure. The management will revert soon, said a source on condition of anonymity.
Huge losses
The port is likely to report a loss of around Rs 129 crore this financial year, mainly due to the complete stoppage of coal handling and iron ore in the last two years. The loss will be high despite getting a dividend of Rs 20 crore from Ennore Port Ltd (EPL) in which ChPT is a major equity shareholder.
Equity shareholding
As part of the austerity measure, ChPT sought an increase in equity shareholding of ChPT and the Centre in EPL by another Rs 100 crore to earn more dividend.
By changing office working hours and stoppage of overtime, there could be an annual saving of Rs 30 crore to Rs 40 crore. A significant reduction in CISF security, which mans the port, without compromising on security, has also been planned.
The port handled 53.40 million tonnes (MT) of cargo in 2012-13, a 4.15 per cent decline over the previous year. 2013-14 traffic is expected to be at 54 MT, a marginal increase of 0.60 MT. While revenue is estimated to be Rs 636 crore in 2013-14, expenditure is likely to be Rs 630.65 crore, with a surplus of Rs 5.35 crore.
The recent wage revision is likely to burden the port trust with an outgo of Rs 129 crore as arrears to the employees.
Salaries and wages expenditure, which used to be half of the total expenditure up to 2007-08, is now around 65 per cent, the source said. At the meeting, trustees representing workers said that in the last two financial years, the management has been saying that the port would make a loss of Rs 22 crore and Rs 51 crore, respectively.
However, it ended up making Rs 22 crore and Rs 18 crore surpluses, respectively. “The management is deliberately projecting a bleak scenario and wants to introduce austerity measures against the workers’ interest,” they said.
A study shows that only 9 MT of additional cargo handled at Karaikal, Ennore and Krishnapatnam ports can be diverted.
However, not all cargo will come to Chennai port, leaving the choice of introducing austerity measures to improve the balance sheet, the source said.