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Mumbai port's special VRS scheme

N. K. Kurup

THE best part of the Mumbai Port's ``strategic plan'' for development is its proposal to trim the labour force. But it will also be the most difficult one to implement, going by past experience. According to Port Trust's estimates, around 14,000 workers, nearly half total labour force, are redundant. The Port Trust has drawn up a special VRS which, according to its chairman, Mr. Arun Mago, is attractive and will cost Rs. 700 crores if accepted by all.

The scheme envisages compensation of two months salary for every completed year, with a weightage for every five years of remaining service. This is an improvement over the previous VRS in 1992 which offered one-and-a-half months salary for every complet ed year.

For Mumbai port, funds are not a problem; its reserves exceed Rs. 5,000 crores, though its annual revenue surplus keeps dipping. The question is how many of the 14,000 workers are willing to leave the port, as only around 1,500 opted for the last VRS. Th e first hurdle will be to get the unions' support. Unions are unlikely to support the VRS openly, as they have been resisting any move to rationalise manpower deployment at the port.

The port management, according to Mr. Mago, has sent the VRS to the Surface Transport Ministry for approval. But enquiries revealed that the proposal is yet to be passed even by the port trust's board of trustees.

The excess labour force at Mumbai Port is not something that developed overnight. High manning levels have been the bane of the country's premier port for years. And the management was able to do little to improve the situation. Of course, as Mr. Mago sa id at a recent press conference, a beginning was made by rolling back the retirement age from 60 to 58 years _ and yet the excess labour at the port numbers 14,000.

With increasing competition from neighboring ports, Mumbai has begun feeling the pinch. The volume of traffic is shrinking. Container throughput dropped by 15 per cent to 4.29 lakh TEUs in 1999-2000, and the situation is unlikely to improve this year.

On the revenue side, the port ended last year with a modest surplus of Rs 48.89 crores. Even this would not have been possible but for deferring the implementation of the new wage scales. Salaries and wages account for 70 per cent of the total operating expenses of the port.

Mr. Mago admits that productivity at Mumbai is lower than at the Jawaharlal Nehru Port and the new private sector terminal at Nhava Sheva. Besides high manning levels at Mumbai, the equipment is old. He blames the government policy of not allowing the po rt to acquire modern equipment before the expiry of the economic life of the old ones.

Of course, Mumbai port has certain inherent disadvantages, such as lower draft. But the port trust has sufficient funds for modernisation, and the port management has the freedom to invest in new equipment. The fact is that the port administration has ne ver tried to foresee things. The lethargic officials and the belligerent unions live for the day. Mumbai's status as the country's premier port has made them complacent.

And all this has made Mumbai the costliest port in the country. The terminal handling charge (THC), for instance, is the highest in Mumbai among all the major ports. As port management has little control over some of the components of THC, the port trust has now approached the Tariff Authority for Major Ports (TAMP) to officially notify these charges.

What the Mumbai Port needs today is dynamic management with total autonomy. Competition is growing, and fast. The port, the crucial link in the infrastructure network, cannot remain static. Mumbai port has to actively pursue the cargo-handling standards of other ports if it has to remain in operation. For this, what is required is not a VRS but a CRS (Compulsory Retirement Scheme.) The port trust should offer a retirement package which the workers cannot afford to refuse. After all, the port has large r eserves, using a part of which for the CRS could only benefit the port in the long term.