02 December 2003

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Shipping tariffs increase seven to 14 per cent, FOI expresses grave concern

- all sectors becoming increasingly vulnerable in a difficult global market environment

The Federation of Industry yesterday expressed dire concern over the euro tariff introduced by the seven members of the shipping conference for Italy, Malta and Tunisia.
The tariff, which became effective on 15 November, has been used by the conference lines as an occasion to implement an increase in sea-freight rates between Malta and Italian ports such as Reggio Calabria, Catania and Genova and for shipping of merchandise to and from Tunis and Marseilles, the FOI said yesterday.
Commenting on the state of affairs, the FOI said yesterday, "The Federation cannot but express its total disappointment that vital transport links for shipping and receiving merchandise have been hit by tariff increases ranging between seven and 14 per cent.
"The situation is all the more serious when this increase follows another 10 per cent implemented two and half years ago. Malta’s industry – a vital sector in our economy that generates the highest value-added in the country – is suffering from diminished competitiveness and this is yet another serious blow that will continue to weaken industry’s performance."
The FOI added that discussions on the matter with Sea Malta resulted in the understanding that local government-induced costs and international compliance costs are the root cause of such an increase in tariffs.
"Locally, official registration fees of vessels were increased substantially for no apparent reason and pilotage fees were increased by 90 per cent. There were also new international compliance costs connected with the implementation of the International Safety Management (ISM) code and the new international ship and Port Facility Security Code (ISPS)."
The FOI warned all stakeholders in the economy that industry is facing severe competitiveness problems and as a result companies have repeatedly registered a reduction in profits – a situation that could not be borne indefinitely.
The FOI comments, "It was therefore to be expected that industry had to take drastic decisions, and over the past year there have been a consequent number of closures of enterprises and a reduction of several hundreds jobs.
"There should be no illusions about industry’s disappointing performance being limited to the clothing industry. Enterprises in other sectors that are usually considered to be strong are becoming increasingly vulnerable in a difficult global market environment. Even the tourism sector is suffering from lack of competitiveness and from decreased profitability.
"There is no time to lose to tackle business competitiveness on all fronts, and government cannot be excused any further for its lack of interest and action on the reform agenda for the economy. The pressure of competitiveness should now be a matter of urgent national concern," the FOI warns in no uncertain terms.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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