While the decrease in operating income has been marginal, operating expenditure shot up from Rs 457.57 crore to Rs 516.88 crore. Since almost 60 per cent of this comprises wages, the expenditure is expected to increase even more next year, with wage revision round the corner.

The port authorities have attributed the lower surplus to the decline in POL traffic from 20.52 million tonnes in 1995-96 to 16.67 million tonnes in 1998-99. Non-POL traffic has also declined by almost 1 million tonnes to 14.28 milion tonnes. Container traffic also registered a sharp decline to 5.09 lakh teus,from 6.01 lakh teus in the previous year.

Although threatened by declining volumes, MbPT has stepped up its modernisation drive. The port has accepted the recommendations of Japanese International Co-operation Agency to construct three deep draft off-shore berths. MbPT is now in the process of appointing consultants. According to Arun Mago, chairman, the project would be implemented either through joint ventures or on a BOT basis.

Meanwhile the port has decided to go ahead with its privatisation plans. Global tenders have been invited for long term lease of two container terminals and five berths in Indira docks with the back-up area and container freight station, and also two general cargo terminals. Mago said that around 18 private companies had shown interest in the project. The last day for submitting bids is May 31, 1999.

Preliminary discussions have also been held to commercialise the operations of the port's dry docks with private sector participation, but this is currently facing oppositionfrom the port unions.

While decreased oil traffic has contributed to Mumbai Port's traffic decline, capacity augmentation is being carried out at a cost of Rs 500 crore, including modernisaton of the oil handling facilities. Replacement of submarine pipelines connecting the oil terminals to the refineries is in progress, upgradation of its three jetties will be taken up in the second phase. This would enhance its oil handling capacity from the present 21 million tonnes to 35 million tonnes depending on the cargo mix.

The port is also planning to add one more chemical jetty with a capacity of 3 million tonnes on a BOT basis. According to Mago, the feasibility report will be ready in a couple of months. The port has already undertaken replacement and modernisation of equipment for which Rs 350 crore have been earmarked in the ninth plan. The programme includes adding one gantry crane, procurement of eight 10-tonne capacity wharf cranes and a 125-tonne floating crane.

The port is also planning to acquiretwo dock tugs and two harbour tugs, while it is mulling over a proposal to integrate its railway system with the Indian Railways, though this again is being opposed by the unions.

In order to streamline its activities, the port was also reviewing simplification of its systems and procedures, cost cutting, rationalisation, redeployment and downsizing of its manpower.

In this connection, Mago said they were identifying personnel who could be offered a voluntary retirement scheme. The port has a labour force of over 32,000. It may be recalled that around 2000 people took advantage of a VRS offered by the port around two years back.