The mess at Haldia port

PRATIM RANJAN BOSE | Updated on March 12, 2018 Published on November 08, 2012

The change of government in West Bengal has not augured well for Haldia Bulk Terminals Ltd. — A. Roy Chowdhury

The politically powerful anti-mechanisation lobby, by driving out Haldia Bulk Terminals, has stalled reforms at the port.

It is not unusual for businesses to turn unviable and wind up. There are also examples of relationships between companies and their vendors turning sour. All these are part of life.

But, there are questions galore when a business quits, citing lawlessness on the back of serious viability concerns.

Politicians dabble in issues that should have been settled between the businesses; the State Government rubbishes the complaints lodged by an investor, as ‘concocted’ or ‘fabricated’; and the judiciary pulls up the administration for “lack of initiative” in responding to complaints lodged by business.

That is exactly how the entire imbroglio concerning Kolkata Port Trust (KoPT) and its vendor, ABG-LDA-run Haldia Bulk Terminals Ltd (HBT), unfolded during the last one month.

Political grip

While the controversy has every potential to end up in a protracted courtroom battle, the core issues are a tussle for control over dwindling cargo offerings at the port and a conflict of interests over port operations.

As part of its survival strategy in the face of natural decline in draft, the Kolkata Port opened a new dock system down the river at Haldia in late 1970s. The presence of heavy industries in the region offered the port system an opportunity to attract bulk cargo.

But Haldia became a fiefdom of a couple of stevedores and political forces from Day One. While the operations remained vastly non-mechanised, stevedores with political backing took control of onshore movement of cargo, without any financial obligation to the port authorities.

The result was that operators minted money. Politics took full advantage of a regime of low mechanisation by exercising a strong grip over contract labour recruitment. The port earned peanuts. Users greased palms to ensure that they did not end up paying high port charges for delay in loading and unloading.

The inefficiencies, coupled with the fundamental inadequacies of a riverine port, made Haldia so expensive that it made sense for many exporters and importers to shift operations to Paradip in Bengal or Dhamra in Odisha.

A sharp drop of investor interest in West Bengal following the Singur episode in 2008, curbs on iron ore export, and the overall economic downturn left the port in serious trouble. Improving upon operational efficiencies was the only option for the port to survive these adversities.

A chance wasted

The opportunity came in 2010 when KoPT appointed a contractor for mechanised dry-bulk cargo handling. Dry bulk is the lifeline of the port. The initiative was part of the Union Government’s capacity-building exercise in all major ports. But, for the beleaguered KoPT, it was an opportunity to clear the mess at Haldia in a single stroke. The port was faced with the possibility to earn double the revenue for the same cargo offerings. The arrangement was a win-win for end users as it offered them a more efficient logistics solution, at a lower cost.

But, it also meant a threat to the existing business lobby at Haldia. Since a mechanised port would require less labour, politicians were not happy with the situation either.

The conflict of interest was evident from the beginning. ‘Popular’ protest delayed commissioning of equipment for months, till the court asked the administration to ensure security.

The shift in political control of West Bengal between 2008 and March 2011 ensured that buying peace would not be easy. A recent telecast on a Bengali news channel showed a local Trinamool MP taking a vow, way back in 2010, to throw ABG out of operation.

As a result, there were low cargo offerings to the mechanised berths, as KoPT continued to keep ‘business’ at less remunerative, non-mechanised berths running. In August this year, HBT threatened to pull out from Haldia, unless KoPT offered a bigger share of the cargo. The company was reportedly bleeding due to low capacity utilisation against high labour cost.

Turn of events

It seems that all hell broke loose exactly at a time when KoPT was forced to take a more logical stand of diverting cargo from the non-mechanised berths, dominated by other interest groups.

In an agreement (between the port and HBT) signed before the court on September 12, KoPT offered HBT the first right to handle all incoming cargo. Though port authorities later claimed the development was a goodwill gesture, the reality is that it would have been difficult for KoPT to justify diversion of cargo to other berths that yield half the revenue.

There was, however, no reason for the legacy lobby to welcome this agreement — that too at a time when overall cargo offerings are down. At least two operators with interests in non-mechanised berths went to court to stall the process, but without much success.

The September ‘agreement,’ it turns out, remained on paper, as HBT suspended operations from September 24, citing repeated attacks on its employees leading up to an alleged abduction of key officials, including family members.

The company accused involvement of employees of a dominant legacy operator at the port in at least one of such incidents of violence.

Puzzling decision

HBT is history now. KoPT’s finances are in doldrums. Interest groups that thrived at port’s cost for all these years are once again in control of cargo operations. But, there is at least one mystery that adds another angle to the drama.

Why did HBT retrench 275 “excess” workers on September 24 — barely a month before the Duga Puja festival — within two weeks of the port committing a bigger share of the cargo?

HBT said it was forced by political forces to absorb those workers. Considering the ground realities, the claim may not be unfounded. But, couldn’t it have waited a bit longer?

Or were there some other considerations at work, as alleged by KoPT?

Published on November 08, 2012
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