Port reworks cost structure

The century old Kolkata Port Trust (KoPT) is overhauling its accounting practice from September and reconstituting its different departments into cost centres.

All 14 departments of the Kolkata Dock System (KDS) will migrate to this new system where income and expenditure would be calculated separately by each section.

This would help in detecting inefficiencies in the system, so that solutions can be devised to eliminate drag on performance and revenue leaks.

For instance, costs under heads like electricity, security, fuel, office repair and equipment upkeep and departmental legal procedures would be calculated independently for each department, which would have to make provisions for them.

The situation at present is confused. For example, the mechanical department pays the entire electricity bill of the port. Other departments do not bother about saving on costs.

Likewise, the civil engineering department foots the bill for water.

From now on, each department would have to pay for its own electricity and water bill.

"The effort is to make every single people of the port more conscious. It will also bring in more transparency in port activities," Dr Anup K Chanda, chairman of KoPT, told Business Standard.

The new system would help in calculating the net earnings of each department and in checking misuse.

"Since expenditure was calculated on a consolidated basis, not much attention was paid. Now people would be careful and conscious," a port official noted.

KoPT has dismantled the law department which used to take care of litigation filed by all departments. Each section has been asked to manage their litigation needs.

KoPT has appointed Tata Energy Research Institute (TERI) to conduct an energy audit.

Simultaneously, computerisation of operations was under way, with nine departments already on-line. Five more would be wired by end-December.

"We should move towards a paperless office. This is a futuristic move but we can attain it over a period of time," Chanda noted.

The move was expected to lead to better financial management.

Cash generating departments could focus on maximising income while service oriented sections could work towards becoming revenue neutral.

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KoPT plans

• All 14 departments of Kolkata Dock System will migrate to the new system where income and expenditure would be calculated separately
• Each department from now on will have to pay its own electricity and water bills