The multi-crore scam involving the so-called cargo-handling agents in 12 major ports of India is menacingly contributing to India’s inflation woes besides burning deep holes in public pocket, sources in the Shipping Department say.
Not only this the scam has its own adverse effect on the Rupee-Dollar war causing the Indian currency go weaker, inside reports suggest.
According to reports accessed by The Pioneer the handling agents who have bulldosed into the cargo loading and unloading operations by using their money and muscle power and in utter violation of the MPT Act are not only driving a port to an average yearly loss of `200 crore but also denting the pockets of the importers-exporters by causing an additional loss of `300 crore.
India has 12 major ports. The financial burden thus incurred by the importers is then transferred to the end consumers, sources say.
According to a former Haldia Port official, “The private agents handle cargo absolutely mannually resulting in a very low productivity. As a result a ship is loading or unloading only about 5,000 MT instead of 20,000 MT per day.”
This forces the ships to overstay at the port by and additional 5-10 days on an average because the delay in unloading of a given ship occupying a berth makes the other ships in que to weight at the anchorage for that many days.
Apart from this as manual handling of cargo necessitates entry of only geared ship — vessels fitted with cranes — such ships have to carry that much less cargo (equivalent to the weight of the cranes).
“For instance a ship carrying five cranes will naturally carry 5,000 tonnes of less cargo regardless of the fact that the importer has to pay for the total cargo-carrying capacity of the ship.”
This causes the importer a huge loss on account of “dead freight” for which he has to pay without actually importing that amount of cargo.
This problem would not have taken place had the loading or unloading been done through mechanised system by bringing in efficient players through global tender say sources adding the issue was repeatedly brought before the earlier Shipping Minister GK Vasan “who did the precious little by turning a deaf ear to the problem.”
“Such loss incurred by the importer then is transferred on the end consumer” says Ramakant Burman general secretary Haldia Dock Officers’ Forum adding the result of such an anomaly is reflected on the spiraling cost of imported coal used for thermal and steal plants, cement, steel, manganese ore, met coke, lime stone etc. “As a result the cost of power, cement, construction steel, bicycles, motorcycles, steel furniture, steel utensils etc go up” he says adding the power costs also go up on this account burning a hole in consumers pocket. The hiked power tariff in turn has a cascading effect on production cost of other items that need power finally affecting the common man.
Again since the private handling agents charge anything they want without sharing a farthing with the ports the cargo handling rates are about five times as high as the normal rates if they were to be fixed by the Tariff Authority for Major Ports in pursuance of Section 48 of the MPT Act.
“This is a glaring example of cost-push inflation on account of inefficiency of cargo handling at the ports,” says Burman.
A letters written by Gujarat BJP MP Mansukh Bhai Vasava to then Prime Minister Manmohan Singh drawing his attention also threw ample light on the issue.
Apart from the spiraling prices the importers and exporters also have to pay demurage to the ships that have to weight for additional days at the harbour draining out on an average $ 200 million per year (in foreign currency) per port.
Drainage of foreign currency to the tune of $ 2,400 million is invariably causing an “imported inflation” and triggering a matching fall in the price of Rupee, Burman says adding the scam bears a direct impact on India’s inflationary trend affecting the GDP.
“It has been emperically established by economics that there is an inverse relationship between GDP growth rate and inequality in the distribution of income. Since port scam is increasing the inequality in the distribution of income --- causing a zero-some growth --- the GDP growth is adversely affected at the national level,” the whistle blower in the port scam who is fighting two PIls in Calcutta High Court adds.