Mumbai port is sinking. For the first time in its long history, the country's premier port and Mumbai's biggest land-owner is heading towards deficit. (Since the port is managed by a board of trustees, it is not supposed to make profits or suff er losses. It only reports surpluses and deficits.) If estimates are anything to go by, the port will end 2000-01 with an operating loss of Rs. 50 crores. Taking into account the wage arrears from January 1, 1998, which the port management agreed to pay this year, the deficit will mount to over Rs. 300 crores.
Five years ago, (the year ended March 1996), the Mumbai port had a peak surplus of Rs. 268 crores, which gradually slid to 48 crores in 1999-2000 -- when the port handled a traffic of 34 million tonnes.
Today Mumbai port is ranked fourth in terms of volume of cargo handled. Kandla in Gujarat, despite the natural disasters, is at the top with a throughput of 46.67 million tonnes, followed by Vizag with 39.51 million tonnes and Chennai 37.44 million tonnes.
Mumbai Port today employs around 30,000 workers to handle 30 million tonnes of cargo. More than half of it is liquid cargo, the handling of which is fully mechanised. In contrast, the neighboring JNPT employs 3,000 workers to handle 14 million tonnes of cargo. Mumbai Port has one of the highest manning scales among all the ports, and an internal study has identified 14,000 employees to be made redundant.
Since the port has over Rs. 3,000 crores in reserves, the impact of the loss may not be felt immediately. The port trust board is scheduled to meet later this month to transfer Rs. 500 crores from its reserves to pay wage arrears and pensions. But if the current trend continues, the 128-year-old port may soon become sick.
The state of affairs at Mumbai Port is testimony to the utter lack of vision and strategy on the part of those responsible for the management and development of the country's ports. Secretary to the Surface Transport Ministry, Mr. R. Vasudevan, called fo r a rethinking of the national port development strategy. At a recent gathering of port managers and users, he highlighted the need for a new style of dialogue between labour and port management.
But there is no serious effort either on the Government or port trust's part in this direction. Productivity at Indian ports, despite having improved considerably in the recent past, is still the lowest compared to major international ports. Mumbai port is understood to have drawn up a new VRS (voluntary retire ment scheme) six months ago, but the Government has yet to approve it.
A time-bound plan on manpower rationalisation is critical to corporatise, and eventually divest, the government ownership of ports, which is high on the surface transport ministry's agenda.
The Government is eager to create additional port capacity in the private sector. It is estimated that by the end of the Ninth Plan, the country needs port facilities to handle 424 million tonnes of cargo, of which 45 million tonnes will be handled by mi nor ports. So far, 15 projects, aggregating 57.30 million tonnes, with an estimated investment of Rs. 4,736 crores, have been approved and another eight projects, involving 34.90 million tonnes, are in the pipeline.
While creating additional capacity is imperative, it is necessary to make the demand projection realistic. Today, a major problem that Mumbai Port faces is shrinking cargo volumes. Container traffic fell from six lakh tonnes to below four lakh tonnes. Th is is not a sudden or unexpected development. The traffic has moved to the Jawaharlal Nehru Port, which has created a new private terminal that is more efficient. The Mumbai Port should have anticipated this.
Even now, the port's management does not appear to be worried about the situation. The management lacks the approach and attitude of a commercial organisation, which is crucial to face private sector competition. Time is running out for Mumbai. The port management and workers unions should work out a time-bound strategy to save the port from sinking. The Surface Transport Ministry should also play its part well.