Cargo Handling denied first refusal

The government yesterday informed the General Workers' Union that it was rejecting its request to have the right of first refusal in connection with the call for tenders for the provision of cargo handling services.

The decision is a major blow to the union's Cargo Handling Co. Ltd, which holds a monopoly for various port operations until July 2006.

Last Friday, the government informed the shareholders of Cargo Holding that it would be issuing a call for tenders for the operation of various port services, potentially cutting off a major source of revenue for the GWU.

The GWU had asked the Minister for Competitiveness to extend the contract of Cargo Handling Co. Ltd beyond 2006, a request that had been turned down. Minister Censu Galea, however, agreed to present to the Cabinet the GWU's request to give the company the right of first refusal.

After yesterday's Cabinet meeting, GWU general secretary Tony Zarb was informed that the request had been turned down. Contacted later, Mr Zarb said he was not in a position to respond.

The government has embarked on a ports restructuring exercise in a drive to make the ports more competitive by reducing costs and eliminating obsolete work practices.

In the meantime, The Times yesterday obtained excerpts of a report drawn up by the internal auditors of the Malta Maritime Authority which says that Cargo Handling Co. Ltd was in "serious breach" of its obligations under the contract of service.

Among others, the report states that the company does not provide efficient and cost-effective cargo operations and has repeatedly failed to comply with the authority's instructions to improve workmanship and provide services with due diligence.

The company does not submit annual operational reports and does not maintain plant and equipment in a good working condition. It did not replace plant and equipment destroyed or damaged beyond repair, such as cranes and forklift trucks, the report claims.

Cargo Handling failed to take the necessary precautions to adequately protect property, workmen and third parties from injury.

It failed to obtain the permission of the authority to sub-let any part of the contract. In addition, it allowed its unauthorised sub-contractor to charge port users over and above the tariff charges levied by the company.

The report states that the Port of Valletta is losing opportunities to attract new types of business and a major contributory factor is "no doubt" the poor quality of cargo handling services and the lack of value for money.

The company was not customer focused and not commercially oriented. Port users were very dissatisfied with the poor and sub-standard cargo handling service provided and the company "remains firm" in its reluctance to improve its service and comply faithfully with the terms and conditions of its contract of service.

"It enjoys a monopolistic position which it has clearly abused and which must be regulated to ensure quality of service, value for money and to assist our local port and manufacturing industries to become more competitive," the report concludes.