Kolkata port readies plan to cut dependence on subsidy

To implement five public-private partnership projects by 2012 at a cost of Rs 2,300 crore.

Kolkata Port Trust, the country’s oldest major port, is devising a strategy to bring down its growing dependence on government subsidies for dredging. There has been a 55 per cent increase in the dredging subsidy given to the port last year, with this year’s subsidy amounting to Rs 423 crore. Last year, this amount was Rs 273 crore.

Since the 1960s, the overall money spent by the government on the Kolkata Port under its non-plan subsidy stands at over Rs 4,200 crore, all of which has been deployed on the dredging expenditure.

“Round-the-clock and round-the-year dredging in the channel is going on. The necessary work order has already been issued for opening this channel and the work has already started,” said Kolkata Port Trust Chairman M L Meena.

In order to cope with the problem, the Kolkata Port has devised a three-pronged strategy. As a short-term measure, the port has opened a separate channel, Eden Channel, for Haldia-bound vessels. The work on this channel is scheduled to be completed by March 2011.

Second, it has identified five public-private partnership projects to be implemented by 2012, with an investment of Rs 2,300 crore. Four of these will be commissioned at Haldia: the development of four barge-handling jetties, Outer Terminal 1 and 2, and the construction of bulk-handling terminals at Haldia Dock II. “I want to complete the process as early as possible. All these facilities will be created on a PPP basis to handle bigger vessels with a higher parcel load,” said Meena.

Thirdly, the port has identified several deeper drafted locations in the river for development of new port facilities through the public-private partnership model. These are Haldia Dock-II at Salukkhali, seven km upstream of Haldia, the Diamond Harbour container terminal at Diamond Harbour, 70 km downstream of Kolkata, and a full-fledged facility at Sagar Island, 145 km south of Kolkata. However, there is no deadline for these projects yet.

“However, till such time the new facilities are commissioned, the dredging subsidy may be required to be continued so that the economy of this area and the industries dependent on the port do not suffer,” said Meena.

The extent of the Kolkata Port’s dredging expenditure can be understood from the fact that the port’s contribution to the dredging undertaken by the 12 major ports in 2009-10 is the highest at 56 per cent (Rs 417 crore) of the overall expenditure (Rs 750 crore). In 2008-09, the port’s share in the total dredging expenditure of Rs 670 crore was 52 per cent.

From 2008-09, a declining trend in traffic was noticed due to a critical draft situation in the river consequent to a huge shortfall in dredging by the Dredging Corporation of India in the previous years. In 2009-10, there was a reduction in traffic by about eight million tonnes compared with the previous year, mainly because of the shift in crude traffic from Haldia to Paradip.

The total income of the port increased by a marginal 1 per cent in 2008-09 to Rs 1,466 crore.

The total traffic handled in 2009-10 was 46 million tonnes as compared to 54 million tonnes in the previous year. Over 65 per cent revenue of the port comes from Haldia Dock Complex.

“After the inception of Haldia Dock Complex, several committees were set up to examine the relationship between Haldia Dock Complex and Kolkata Dock System. None of these committees found any rationale in delinking Haldia Dock Complex from Kolkata Port Trust, since both these dock systems are complementary to each other,” Meena added.

Alongside, the port has seen a consistent rise in its wage bill, with Rs 360 crore spent in 2009-10 compared with Rs 243 crore in the previous year. A restriction has been imposed by the government on fresh recruitment of staff at the ports, except for technical and operational people essential for the port’s functioning.

The net surplus of the port came down drastically by 85 per cent in 2008-09 to Rs 78 crore from Rs 530 crore in the previous year. For 2009-10, the net surplus is Rs 121 crore.

“Various development programmes are being undertaken by the port to reduce the dredging cost and increase traffic volumes. After their implementation, Kolkata Port will once again become a premier port,” said Meena.