Cargo Handling Co.

One of Malta's top priorities is its competitiveness. No doubt about it. Reform and restructuring are required to reach this ultimate objective. Thus, the long awaited port reforms are an essential part of the country's strategy to implement the necessary changes.

Our ports play a major role in the commercial business world. They generate employment for thousands of workers. The local business and commercial community are directly involved and dependent on the efficient organisation and smooth running operations at the ports. The consumer in general is the ultimate customer of the various services provided at the ports.

Whether it is exports, imports or transhipment, the port is the key player throughout the shipping operation and the business transaction. It is therefore reasonable to look at the port reform from a wider perspective and in a different manner from the rather acute and sectorial way that we normally reflect on when coming to restructuring government departments or public entities.

The port reform in itself is a national issue. Partisan politics should not feature in the process. All stakeholders - the business community, the unions, the consumer and the administrators of the ports - share equal responsibility to participate in the reform discussions so that the best possible deal could be achieved in the national interest.

Unfortunately, the initial contributions published recently in the press on this subject do not encourage a healthy environment to discuss this issue in an objective and open manner. It is my view that the government has already embarked on a media strategy to win public opinion by politicising the issue, harping on the involvement of the General Workers' Union and its members at the ports.

This is so evident with those who genuinely believe that the big hurdle at the port is none other than Cargo Handling. The perception that doing away with Cargo Handling will result in more cargo ships entering our harbour, imports becoming cheaper, exports increasing in volume and the pricing of products at our shops and supermarkets going significantly downwards, is spreading widely.

It is an odd perception, built upon lack of knowledgeable information, misinterpretation of studies commissioned by the Federation of Industry, and political bias. The reality is different. The truth is far beyond such general impressions. Reforms are based on facts. Their success or otherwise depends on a sound analysis of the facts upon which recommendations are made. And these recommendations have to be factual.

What are the facts?

Fact 1: The company.

Cargo Handling was set up in 1973. Its raison d'être was similar to that carried out previously by the Malta Landing Co. Ltd. The GWU had accepted the invitation to take over the new company as its sole shareholder. However, the government reserved the right to appoint four members to serve on the board of directors of the company.

The company has entered into a sub-contracting agreement with the then Department of Ports which specified the rights and obligations of the new company. This was later renewed with the Malta Maritime Authority, which took over the responsibility of the contract in question on behalf of the Maltese government.

This contract, which is still in effect, expires in 2006. It basically regulates the utilisation of the plant and equipment, the procedures to be adopted during the cargo handling operations, and imposes restrictions on recruitment of staff and conditions of employment with the company. The company's fees and charges for its services cannot be negotiated but are fixed by government tariffs. They have not been revised since 1994. On its part the company is obliged to provide the necessary equipment and invest in new machinery in addition to maintaining the existing plant and equipment in good working order. Over and above, Cargo Handling has to pay to the Malta Maritime Authority an annual fee of Lm100,000 for the lease of cranes, forklifts and other equipment.

Fact 2: The function.

The company employs around 130 people, between industrial and non-industrial workers. Basically it executes the role of dues collector for the Malta Maritime Authority as far as domestic cargo handling is concerned. It collects fees and charges from importers, shipping agents, and exporters and pays the shares due to the various service providers at the ports, such as the port workers, Malta Maritime Authority, foremen, delivery and tally clerks.

On the other hand, it provides the manpower, resources, facilities and equipment necessary during the loading and unloading of cargo. The company is also responsible for the release of the cargo. It also offers the usage of storage facilities for loose cargo. The company acts both as an agent for the MMA, and to some extent as a terminal operator at the Grand Harbour. With the setting up of the Malta Freeport, most of the handling for domestic import and export is taking place at the Marsaxlokk terminal. However, Cargo Handling still assumes the responsibility for the handling of domestic cargo taking place over there and gets paid for the services it provides.

Fact 3: The charges.

Is the company enjoying the privilege of ensuring its earnings through its monopolistic activities? How can it be, if the charges are specified under the Port Tariffs Regulations! Irrespective of its operational costs and labour and overheads expenses, the company has to stick to the rate imposed by law. In the case of a 20 foot container, total costs may amount to over Lm200. The share retained by the Cargo Handling is merely 11 per cent. The remaining 89 per cent goes to other service providers. If the total cost for a 20 footer is relatively too expensive it has nothing to do with the Cargo Handling's direct charges. Why all this fuss then?

Fact 4: The shareholders.

Cargo Handling is a privately owned limited liability company. It is run on a commercial basis and is there to make profits like any other business concern. It has the characteristics of a natural monopoly, like Gozo Channel, Tug Malta Ltd and other government-owned companies or agencies.

They provide an exclusive service within a relatively small and very restricted market. However, the company is strictly regulated both by contract and at law. There is nothing contradictory to the commercial world in all this. Not even on the question of the shareholding. Apart from striving to increase their membership base, unions around the world seek ways and means to sustain their assets through investments in commercial entities.

The GWU has followed suit. It invested in a travelling firm, insurance agency, printing press and in the cargo handling operations. After all, it has created jobs for hundreds of workers. So, if I may ask, why all this fuss about the GWU being a shareholder?

Cargo Handling is here to stay. It is a necessity within the process of port activities. It may have a different set-up and perhaps its terms of remit need an update. It can extend its functions to become a terminal operator within the Grand Harbour. The existing company has the willingness and the resources to enforce the necessary restructuring. The know-how, potential and experience are not missing.

With some further investment in plant and equipment, the company may also engage in other maritime cargo activities. It can also attract cargo which, with the existing facilities, is currently not catered for. As a terminal operator, the company may act as a leader in promoting our cargo handling facilities through an on-going marketing campaign.

But it takes two to tango. The government is aware of the company's genuine strategy for the future. Proposals were presented to the task force for consideration and further discussion. But so far, things were kept in abeyance except for the unfair criticism levelled at Cargo Handling. There is no justification in playing the game of robbing Peter to pay Paul. The company is a business concern and not a political unit and as such it should be left out of any political controversy.

Where overhauling or fine-tuning are concerned the GWU is more than prepared to make the leap forward in the interest of all concerned, particularly the workers.

This time round we are not declaring enough is enough... but simply that we do mean business!

Mr Micallef is deputy general secretary of the General Workers' Union.