Coronavirus: Government mulling aid for businesses amid economic impact

Almost all hotel conference bookings cancelled • Freight transport functioning normally so far amid growing uncertainty

Finance minister Edward Scicluna
Finance minister Edward Scicluna

The government is currently in discussion on possible measures to help businesses suffering from the coronavirus’ impact on the economy, BusinessToday has learned.

Finance minister Edward Scicluna told this newspaper that his ministry was evaluating the likely economic impact of the virus on each sector of Malta’s economy, and was in discussions with Malta Enterprise, other business representatives and the banks to learn of the particular needs of industry in the current difficult situation brought on by the spread of Covid-19.

 Until Wednesday, Malta had registered six cases of coronavirus, with the government having put in place travel bans to high-risk countries, a mandatory quarantine and restrictions on mass events.

“The set of measures which will be announced in due course will abide by the EU state-aid decisions and programmes approved for this particular circumstance,” Scicluna said.

He added that some of these decisions will be taken by EU Finance Ministers at the forthcoming Eurogroup/ECOFIN meetings, due to be held early next week.

Scicluna’s comments come amid growing concerns within Malta’s business community related to the developing Covid-19 situation.

Earlier this week, the Malta Chamber of Commerce met with Prime Minister Robert Abela to underline the importance of assisting businesses in these extraordinary times.

The Chamber’s president David Xuereb called for an assistance package for businesses to mitigate any liquidity issues companies may face in the context of temporary loss of business due to the virus.

Yesterday, HSBC introduced a number of measures to support businesses, including capital repayment holidays, fee-free temporary short-term working capital funding, faster turnaround on issuance of shipping guarantees and the waiver of urgency fees, as well as the waiver of amendments fees on Letters of Credit impacted by delays.

The measures will come into effect immediately for businesses which meet the bank’s credit criteria.

APS Bank said it was confirming its commitment to engage with customers and sectors which were being adversely affected by the virus to determine if any supporting measures were required in the circumstances. “Each case would be treated on its own specific merits,” APS Bank said in a statement on Wednesday.

Almost all hotel conferences booked until May have been cancelled

One of the sectors most hard hit by Covid-19 is travel and tourism, which have taken a big hit worldwide.

On Wednesday, the Prime Minister announced that all air and sea travel to and from Germany, France, Spain, Switzerland and Italy would be halted.

MHRA boss Tony Zahra
MHRA boss Tony Zahra

Malta Hotels and Restaurants Association president Tony Zahra told this newspaper that almost all conferences which had been planned to be held in local hotels until May have been cancelled or postponed.

“When it comes to MICE (meetings, incentives, conferences and exhibitions), almost all groups have cancelled their hotel bookings,” he said.

Asked what would happen to deposits paid to hotels by conference organisers, Zahra said that, for events which were postponed, the hotel would generally keep the deposit until a later date is set.

For those cancelled outright, the event organisers would generally lose their deposit – which can run into the tends of thousands of euro – depending on the agreement which was signed.

“Everyone is tackling the matter different,” he said, highlighting that hotels had the prerogative on how to tackle such commercial decisions.

When it came to leisure bookings by tourists, the situation was slightly less bleak.

“Not all leisure bookings have been cancelled. Bookings are still coming in, but in much smaller number than before. And there are no bookings for the immediate period,” Zahra said.

Maltese freight transport in Italy still continuing normally

With all of Italy on lockdown because of the large number of coronavirus cases, BusinessToday asked Fahrenheit Freight Forwarders director Sandro Mallia whether freight transportation was encountering any issues.

Mallia said that while their drivers had been experiencing some problems, operations were still functioning.

“The drivers are checked before they board the catamaran in Malta and scanned again when they arrive in Italy,” Mallia said, “Till now, things are still moving.”

The loading and unloading of goods was still taking place in Italy, and work was progressing normally, till now, he said. “

The issue is we don’t know what will happen in the future,” Mallia noted, however.

A source from an unrelated leading Maltese shipping company mirrored Mallia’s feelings of uncertainty. The source told this newspaper that business had to date not been majorly affected, but that there were pre-occupations on what would happen.

As the Prime Minister had announced, the source said, the transportation of goods from Italy was continuing. “We’ve been told by the authorities that we can book drivers,” the source said.

He underscored, however, that Maltese cargo truck drivers were worried. Until last Monday, he said, drivers returning from Italy hadn’t gone into quarantine, but that the situation had now changed, with mandatory quarantine being put in place as the spread of Covid-19 in Italy and other European country increases.

“Our next ship is due on Saturday… we don’t know what will happen until then.”

The source said that he felt it would be best if no Maltese drivers travelled to Italy, and that vice-versa no Italian drivers came to Malta.

This, he said, could be done if loaded trucks were placed on ships heading towards Malta, without a driver. Stevedores in Malta would then unload the goods. “The safest thing would be for no drivers to come and go. This can be done,” he added.

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