New Delhi/Bangalore: As Chennai port fights a legal battle in the Supreme Court to be allowed to handle dusty cargo, the case has brought to the fore a deep rivalry with the neighbouring Ennore Port Ltd.
Both Chennai and Ennore ports, just 24 km apart, are controlled by the Union government. Chennai port owns a 33.33% stake in Ennore port, which is India’s only port among the dozen owned by the Centre that is run as a company. The remaining ports including Chennai function as trusts under a law called the Major Port Trusts Act of 1963.
On 12 September, the apex court directed Chennai port to take pollution control measures within eight weeks ahead of deciding whether the 130-year-old port should be allowed to handle dusty cargo.
The direction came on the basis of a report submitted by an empowered committee set up by the apex court to study the issue. Chennai port had filed a special leave petition in the Supreme Court seeking review of a May 2011 Madras high court order directing the port to stop handling dusty cargo such as coal and iron ore from 1 October 2011. The court order came after hearing petitions filed by resident welfare associations citing health hazards from dusty cargo handled at Chennai port.
Atulya Misra, chairman of Chennai port, submitted before the empowered committee that his port needed time to develop alternative cargo to compensate for the loss of nearly 20 million tonnes of coal and iron ore. Implementing the Madras high court order would also render 1,561 workers surplus and they cannot be transferred to Ennore port as the cargo loading facilities there are run by private entities, he said.
Misra told the committee that control of the berths handling clean cargo such as cars and petroleum, oil and lubricants at Ennore port could be transferred to Chennai port, which can “geographically handle them from Ennore and benefit from their revenues”.
However, S. Velumani, chairman and managing director of Ennore Port Ltd, said the port had committed liabilities to service and hence is not in a position to share its revenue with Chennai port.
“Moreover, Chennai port being an important equity holder in Ennore port, receives regular revenue share through dividends,” he told the committee.
Mint has reviewed a copy of the empowered committee report.
Ennore port was set up in 2001 primarily to handle dusty cargo, but it made no secret of its ambitions to handle clean cargo such as cars, liquids and containers. “No port can survive on one or two commodities. There has to be a good mix of different cargo types to run viably,” a spokesman for Ennore port said.
Chennai port continued to handle coal and iron ore that accounted for 40% of its total cargo in 2010, adding to the bitterness. It also led to a backlash from people residing around the Chennai port.
In the year to March 2012, Chennai port posted a net profit of Rs.6 crore, whereas Ennore Port notched a net profit of Rs.96.72 crore.
In its report, the seven-member empowered committee headed by Pradeep Kumar Sinha, shipping secretary, recommended that “handling of coal may not be permitted at Chennai port and may be diverted to Ennore port”.
The panel, however, said a final view on allowing Chennai port to continue handling iron ore could be taken on the basis of pollution mitigation measures adopted by the port. “Chennai is in the process of filing an affidavit before the Supreme Court explaining what it intended to do,” a port spokesman said.
Referring to the fight for the same cargo between the two ports, the committee said that there was “substantial loss of cargo to Chennai port as a result of the shifting of dusty cargo to Ennore”.
“It may not be practicable to transfer the surplus staff from Chennai port to Ennore port as both ports are based on different governance models,” the panel wrote in its report.
“Ennore is a landlord port company with minimal staff and all the berths and facilities are operated by private firms. Given these constraints and keeping in mind the need to compensate Chennai port in terms of loss of revenue and cargo, the empowered committee recommends that the shipping ministry may constitute an internal working group to suggest possible re-distribution of clean cargo between the two ports and also to suggest any possible method of Ennore compensating Chennai in terms of loss in revenue,” it added.
Significantly, in its 11 May 2011 order restraining Chennai port from handling dusty cargo, the Madras high court gave directions to distribute cargo between the two ports by allotting clean cargo such as cars and containers to Chennai port and all dusty cargo including coal and iron ore to Ennore port. The court also directed that workers and pensioners rendered surplus by the shifting of dusty cargo should be taken over by Ennore port. Chennai port has now sought government support to create operational synergy between the two ports. “We can set up cargo handling facilities at Ennore port and earn revenues,” the Chennai port spokesman said. “Instead of competing negatively, the two ports can compete positively”, he added. “It’s a call the government has to take.”