Freeport planning increased productivity

Malta Freeport is planning to increase productivity with a view to keeping its share of a market that has more than doubled in the Mediterranean region, the House Public Accounts Committee has been told.

Freeport chairman Mark Portelli said that with this in mind, the latest collective agreement for company employees included an incentive package and greater flexibility by the port workers.

Crane configuration was being reviewed with the aim of extending their reach across 20 containers from the present 16, thus increasing efficiency.

Asked by committee chairman Leo Brincat to explain Freeport Terminal Ltd's deteriorating performance in spite of a record-breaking 12.8 per cent increase in traffic at the freeport, Mr Portelli pointed out that the operating loss had been reduced. There had been a downward pressure on rates from foreign competitors, especially Gioia Tauro, which had now stabilised.

He said that except for the crane configuration, the Freeport intended to maintain its present infrastructure, which should be enough to cope with foreseeable demands.

Asked to comment on a recent study that had shown that the government subvention to the Freeport was higher than those for Malta Drydocks and Malta Shipbuilding, Mr Portelli said there was no comparison. The Freeport had spent huge funds on infrastructural works but cash flow had always been positive and running expenses had been borne out of its own revenue generation.

He said that unfair competition for the Malta Freeport took various shapes. The Italian government, for example, had spent some $252 million on various government-financed infrastructural works in different ports.

Dollar exchange rates, too, had been unfavourable.

When it lost a customer due to lower rates from competitors, the Freeport was quick to substitute it with new customers. The recent advent of the Yang Ming K Lines, for example, had brought in 200,000 TEUs a year for an 8.5 per cent increase in movements.

The Freeport's capacity in 2002 was 1.2 million TEUs a year but that could be raised to 1.4 million with additional equipment.

Mr Portelli said Malta Freeport's technological set-up was considered to be among the best, to the extent that other freeports had shown interest in buying the software from Malta Freeport.

Asked if the Freeport should consider offering a more global service through partnership or strategic alliances with other freeports, Mr Portelli said a report had been commissioned some three years ago on the possibility of such an alliance with Gioia Tauro and the Damietta freeport of Egypt, but the proposal had fallen through.