21 June 2006

The Web
Business Today

Industry “disappointed” with port reform

James Debono

“We are disappointed.” These were the first words of the president of the Federation of Industry when reacting to revelations made in sister newspaper MaltaToday that reductions in port costs will not apply as of 1 July when the new cargo handling operator takes over at Grand Harbour.
The five per cent reduction in costs promised by Valletta Gateway Terminals, the new company taking over from the GWU’s Cargo Handling Company, will not come in force on 1 July but will be introduced in a couple of months’ time.
FOI President Adrian Bajada did not hide his disappointment when speaking to Business Today.
“After more than a decade of calling for port reform we cannot but be disappointed. Now that the first move was made, we expected an immediate decrease in costs,” Bajada said yesterday.
The high charges at the ports and unorthodox work practices have rendered Malta a very expensive base unlike other competing ports. The FOI has repeatedly called for serious reforms at the ports for years on end to no avail.On 1 July the consortium formed by Tumas Group and a Singaporean company will take over at Grand Harbour. During a press conference held on 10 June, a 5 per cent reduction in port costs was announced. But last Sunday, Minister Galea confirmed that the reduction in costs will only take place “after the new company settles down, possibly by the end of the year.”
Bajada has already expressed his disappointment to Competitiveness Minister Censu Galea, who reassured him that the 5 per cent reduction in costs would be in place by the end of the year. The minister also reassured Bajada that he is still committed to a heftier decrease in costs after the conclusion of the current talks between government’s negotiating team and other stakeholders.
“Till a year ago we were talking about a 25 per cent reduction in costs. Now we are talking about a 5 per cent reduction in costs by the end of the year. We cannot but be disappointed,” Bajada said.
According to the agreement with the new company, the present labyrinthine system of tariffs will be replaced by maximum charges established by the Malta Maritime Authority.
The consortium, which has taken over the Valletta port, will be allowed to enter into agreements with the service providers already present at the port as well as others.
In this way shipping agents will no longer collect FIOS charges from importers but will have to answer directly to the consortium.
Another category of port workers set to be affected by the proposed changes are cargo haulers, who possess a special security pass which enables them to load goods in a restricted area of the port.
While the government aims to liberalise the job of cargo haulers by allowing different operators to perform this work, the GRTU is insisting that their rights are enshrined by an agreement with the European Union.

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