In its interim report submitted to the ministry of surface transport, the Cornell Group has pointed out that the currently profitable Chennai port is threatened by Ennore, while the Mumbai port faces stiff competition from the Jawaharlal Nehru Port Trust (JNPT) and P&O. To avoid their slipping into the red, the group feels that autonomy from the ministry for operating purposes is essential.

Calling for a clear delineation of responsibilities, the report suggests, "The ministry would establish government policy, the board will interpret and the CEO will implement."

With regards to the Mumbai port, the group has said that considering a mere 7-per cent rise in tonnage since 1990 and diversion of container traffic to JNPT expected to see to a 15-per cent fall in container cargo, the port might turnunprofitable this year itself.

The group said that though the port's reserves are healthy and liabilities low, its financial outlook is alarming since it will incur losses to the tune of Rs 14.8 crore in 2001-02 from a Rs 173.6-crore profit in 1997-98.

The Mumbai port has been profitable but operating surplus has been stagnant over the last five years.

The United States-based Cornell Group has been appointed by the Asian Development Bank (ADB), under its technical assistance programme, to work out complete modalities of corporatisation of JNPT and Ennore port and commercialisation potential of Chennai and Mumbai ports.

In its report, the group has said that reengineering of the ports for success in the 21st Century will require significant structural, administrative and operational changes.

While the government needs to make legal and policy changes, the ports need to adopt internal business tools and processes and competitive and customer-focussed cargo handling practices.

Pointing out that lackof autonomy remains the major hurdle to commercialisation of ports, the group has said that "the board and management structure are not designed for commercial style of activities. Memberships comprise persons of competing interests and many members lack the commercial decision-making background."

It has called for appointment of board members from the business community who have no conflict with waterfront business. The board should appoint a full-time CEO to manage the port and coordinate board activities but he should not have voting rights.

The board and its chairman should become coordinators with the ministry and protect the CEO from political intervention in port operations.