MPT cargo-handling has dipped by about 2% to 27 million tonne from 33 million tonne since April 1 after iron ore handling stopped
Resumption of 100% utilisation of Adani terminal and securing permission to handle imported iron ore, limestone and other products could pull Goa's Murmugoa Port Trust (MPT) out of the current crisis, I Jeyakumar, chairman of the state-owned port, told DNA Money.
"Even though our finances will be impacted this year because of the shutdown of iron ore mining (in Goa), we will manage. We are planning to handle more cargo. Berth 9 (JSW) has been decommissioned and we are planning to handle imported iron ore and other products. JSW is also planning to bring imported iron ore and sand. A hardware conveyor system will be installed by September-October for that. We are taking every step to manage the crisis," he said.
The port's cargo handling has taken a hit since April 1 due to the recent Supreme Court (SC) ruling that led to cancellation of leases of 88 iron ore mining firms. According to Jeyakumar, it has dipped from around 33 million tonne (MT) of cargo to approximately 27 million tonne.
"There are two aspects to the under-utilisation of MPT cargo-handling capacity. First is that the consent to operate (CTO) for JSW's South-West Port Ltd has been revoked by the Goa State Pollution Control Board (GSPCB) and the second is that Adani Murmugoa Port Terminal Pvt Ltd has not been able to utilise its terminal because its business had been affected last year," said Jeyakumar.
He said with some revival in Adani's business, the company has seen its coal handling at berth 10, berth 11 and berth 12 go up and could reach 100% utilisation by July this year. Currently, only 20% of the terminal capacity is being utilised.
The MPT chief said the fate of JSW's terminal was dependent on the National Green Tribunal (NGT) order, which is expected soon.
JSW's South-West Port Ltd alone contributes over Rs 100 crore to MPT's total revenue. MPT enters into a revenue-sharing pact with firms that handle cargo at its terminals. A favourable NGT verdict could also see many steel firms in and around Goa utilising MPT for imported iron ore. This could make up for its loss of revenues due to cancellation of mining leases.
Jeyakumar expects the company's situation to return to normal in two years once iron ore mining in the state resumes with mining leases in place.
The MPT head said the impact of a closure of iron ore mines was severe due to huge HR cost, which constitutes 60% of the company's total operational cost. The port has around 5,000 employees and 4,000 pensioners.
"This year iron ore is a clear loss. But on other hand, there is a buoyancy in cargo handling revenues. However, if you look at our expenditure on salaries that forms 60% of our outflow, it is a major chunk. It will take 3-4 months to get back to normal," he said.
Jeyakumar, however, ruled out any layoffs as MPT is a government operated firm. In the wake of halting of the iron ore mining activities in Goa, private firms like Fomento Resource and Chowgule have retrenched 800 and 500 employees, respectively.
COMING OUT OF TROUBLED WATERS
- MPT cargo-handling has dipped by about 2% to 27 million tonne from 33 million tonne since April 1 after iron ore handling stopped
- MPT expects situation to bounce back to normal in two years once iron ore mining resumes
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