05 July 2006

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Business Today

Industry still disappointed at pace of reform

James Debono

As cargo haulers yesterday brought the Freeport to a complete standstill by stopping the entry and release of containers, the Federation of Industry warned that the GRTU’s actions could have serious consequences on the economy.
The situation at the ports over the past three days since the new tariffs were announced late last week has been one of confusion, with the GRTU claiming higher costs and government insisting that charges are going down.
But speaking to Business Today, the president of the Federation of Industry said he was still disappointed by the pace of reform.
FOI President Adrian Bajada could not hide his disappointment that after 10 years clamouring for port reform, his organisation has ended up seeking assurances that costs will not increase.
“Instead of talking about a substantial decrease in costs, we have ended up asking for assurances that costs will not be increased.”
Bajada said that the MMA and the various operators at the port have assured him that costs will not increase.
In a press release issued yesterday, the FOI reiterated it had assurances by Minister Censu Galea that a reduction in costs will take place even if temporarily charges will remain at the same levels as those imposed before 1 July. 4page 5
Despite the FOI’s appeal for a negotiated solution tensions between the GRTU and Malta Maritime Authority Chairman Marc Bonello remained high yesterday.

The MMA chairman however insisted that now the Freeport operators will simply get paid for that chunk of work for which they were not paid in full in the past.
Bonello pointed out that although the Freeport operators were responsible for all cargo handling at the Birzebbuga port, they were only partially paid for it.
“The Freeport operators were patient enough during the past years when Cargo Handling was paid for work performed by the Freeport. They will only get what is due to them,” Bonello told Business Today.
According to the MMA chairman, Cargo Handling Company gained the right to charge for work performed by others as a result of a compromise in the late 1980s when the Freeport Corporation was set up.
“There was no formal agreement binding the Freeport and Cargo Handling. This was a result of a historical compromise dictated by the circumstances of the time,” Bonello said.
“The only work that Cargo Handling used to perform at the Freeport was billing,” Bonello said.
Bonello reiterated that for now costs at the Freeport will be decreased by five per cent.
“So far we can only decrease unregulated costs at both the Freeport and the Valletta terminal and we have managed to decrease these by five per cent,” Bonello said.
Unregulated costs are based on contracts between the operators and the government.
On the other hand regulated costs based on the Port Workers Ordinance cannot be decreased until a more wholesome reform takes place.
“Hopefully we will be able to reduce these regulated costs by the end of the year,” a prudent Bonello told Business Today.


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