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Modi Govt Snips at Port Lifeline

Narendra Modi

Posted on June 14, 2016

By Sambit Saha, The Telegraph

A few days after Bengal chief minister Mamata Banerjee complained about the lack of dredging drying up the ports of the state, it came to the fore that the Narendra Modi-government has slashed the dredging subsidy for the Calcutta Port Trust (CPT) to a new low in recent years.

The CPT is expected to get Rs 162 crore from the Centre for dredging this fiscal against Rs 276 crore last year, reflecting a 41 per cent decline in allocation. The cutback will look far worse if the port’s actual dredging cost of Rs 425 crore for 2015-16 is taken into consideration.

Calcutta and Haldia are both riverine ports located close to an estuary. Therefore, the CPT faces the challenge to dredge up silt from the riverbed to make the shipping channels navigable. In spite of rising expenses, the Centre’s allocation has declined in recent years, leaving the port, already burdened with a huge pension bill, to fend for itself.

At a meeting with city-based chambers of commerce last week, Mamata had obliquely blamed the Centre for drying up the river.

“There are only two ports in Bengal. That too, they were made to dry up because dredging was not done,” she said, while drawing comparison with Gujarat, which owes a lot to its 17 ports for its rapid industrialisation.

However, CPT chairman M.T. Krishna Babu said that the initial success of the Eden channel, a new passage to Haldia Dock on the Hooghly river, would reduce the port’s financial burden.

“We want to keep the expense at Rs 250-300 crore as the Eden channel will not require much dredging,” he said, indicating that the CPT can make do with a lower subsidy from the Centre. However, it may be too early to conclude anything.

When Union shipping minister Nitin Gadkari ordered the opening of the Eden channel in September last year, it raised twin hopes for Haldia – higher draught facilitating the entry of bigger ships and a drastic reduction in the dredging cost.

However, Eden was initially found to be less navigable than the existing Auckland channel. The situation improved this year, prompting the CPT to decide that it would not dredge the channel at all.

Haldia-bound ships now use only Eden, while Auckland, which runs to its eastern side, is being used as a service channel. The CPT hopes to reduce costs by stopping the dredging of the Auckland channel, which contributed to the bulk of the expense. Dredging will continue at the Jellingham channel, north of Eden, the last passage towards Haldia.

Eden has a depth of 4.4 metres – the difference between the riverbed and the water level at low tide. The tidal rise can add another 4-5 metres to the water level.

The apprehensions

A section of the CPT officials listed two apprehensions that can upset the arrangement – the Centre paying less than the promised amount and the Eden channel requiring dredging.

The port is yet to get Rs 571 crore in dredging subsidy for the last four years. It has spent at least Rs 250-300 crore on its own.

Besides, the Eden channel may need dredging, which will push up expenses.

The port has estimated a net loss of Rs 70 crore this year. It hopes that a 10 per cent growth in cargo at 55 million tonne (mt) against 50mt will fill up its coffers. The loss will widen if the growth in traffic fails to meet the expectation and dredging costs shoot up.

The CPT is now taking a relook at its pension scheme. There are around 28,000 pensioners and the CPT spends Rs 280 crore annually to pay 18,000 people who retired before 2004. It started to buy pension annuities for 5,400 who retired after 2004.

The port spends aggressively on buying annuity schemes for around 500 people who retire every year and to meet the shortfall on account of the increase in dearness allowance or pension revision. Last year, it parked close to Rs 300 crore with the LIC.

The port has now asked banks to close at least 4,200 accounts for not producing life certificates. Port officials believe that 90 per cent of the accountholders may not be alive any more, leading to annual savings of around Rs 70-80 crore.

Moreover, a special team is being sent to the homes of the pensioners aged more then 85 years for physical verification. This has brought many cases of bogus pensioners to light.

The CPT plans to send teams to neighbouring states as well. It has also made it mandatory for pensioners to provide their Aadhar details. The accounts of at least 10,500 pensioners have been Aadhar-linked for better monitoring.

Source: The Telegraph

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