A bad deal for all of us

For years the Nationalist government projected the Freeport as an outstanding success story and wanted to build a monument to Marin Hili who ran it. A few weeks ago this deceit was exposed as Government said that the Freeport was losing millions of liri.

Hili still got his monument as the French company CMA-CGM represented by his family was chosen to run the Freeport after Government privatised it. Years of extravagant and irresponsible spending has changed the 'money no problem' government into a 'problem no money' government and soon into a government with nothing else to sell of our national assets.

Importers and exporters have approached me to express their concern about what is happening at the Freeport. This might sound a boring topic, of interest only to those directly involved in trade, industry and shipping. As islanders, our life depends totally on efficient sea and air links to the rest of the world. So what is happening at the Freeport has serious consequences for all of us, and not just for our exporters and importers. Unable to get their goods delivered to their clients on time, some of our leading exporters talk of relocating their businesses to countries where the links to their markets are more efficient.

By handing over Malta Freeport to CMA-CGM Government has cut a very bad deal. The country has ended up making a financial loss and has lost also strategic control over our major port that handles most of our trade with the rest of the world.

Government's boast that over a 30-year period Malta will get $421 million from the deal is deceptive. Over the same 30-year period Government still has to pay annual interest on the €200.7 million-bullet loan for Terminal 2. Over 30 years this will amount to E6.9 million (Lm2.9 million) per year in extra financing by Government. Maltese taxpayers will have to carry this burden, and not CMA-CGM. Instead of improving Malta's structural deficit and public debt problems, the Freeport's privatisation to CMA-CGM will make them worse.

Government's decision to hand over Malta's only deep draft port exclusively to CMA CGM for 30 years makes our country virtually dependent on CMA-CGM. The Freeport handles 100 per cent of our transhipment business and over 80 per cent of the local trade. Our imports and exports are now in the hands of CMA-CGM. Government has ignored all the demands made by the Federation of Industries and the Chamber of Commerce on behalf of local exporters and importers. They see no economic logic in ceding our major port to one operator, the more so when that operator is a shipping line with an obvious conflict of interest with that of a terminal operator. 

The consequences of the way the Nationalist government privatised the Freeport are being felt: the drop in shipping services, and the gradual disappearance of (third party) feeder services, is unfolding and exporters/importers are really hitting the wall.

So much harm has been done that Maltese shippers have become numb to the extent that they succumb to the consequences and are not raising their voices in protest. Importers/exporters are going round different shipping agencies to try to find a shipping service for their traffic, but to no avail.

The Freeport is experiencing a drop in business because China Shipping is hardly using it any more. They have one ship supposedly every week, but more than likely it is every two or three weeks. They no longer pass their Black Sea traffic via Malta, but call direct.

The same has happened with Norasia and even with CMA-CGM as they go direct to the Black Sea. The Freeport is now working below capacity and contrary to what it was doing a few months ago, some workers and gantry cranes are idle. CMA-CGM, the new masters, are also carrying out a cost cutting exercise and have offered top management two years wages to retire early. Some have already accepted this package and others are lined up.

Rising unemployment

Shipping agents are also shedding employees. Gollcher, had shut down their office at Freeport Centre last June when the EPIC service moved to Cagliari, followed in quick succession by another of their principals, Hamburg Sud - Germany (which took over Ellerman Lines of UK) that also stopped using Freeport.

Recently John Ripard made five employees redundant when they stopped two shipping services of their own shipping line, MEDEX, and is now making another six more employees redundant because of the curtailment of Norasia's services to Malta.

Focal Maritime, agents for the big feeder operator United Feeder Services - Cyprus (UFS), also cut down on their employees because UFS terminated two shipping services (Adriatic-Malta and Turkey-Malta). China Shipping agency will inevitably do likewise because an agency cannot support 20 or more families when ships no longer use the Freeport. This is just the direct effect on shipping agencies and their employees.

Then there is a bigger consequence in as much that the heavy reduction in both deep-sea ships and also feeder vessels means that shipping has become a non-event for our importers and exporters. Mother ships that now no longer use Malta as their transhipment hub automatically create big problems for our importers/exporters for our domestic imports and exports.

Furthermore, the trade routes Adriatic ports-Malta and Turkey-Malta has seen the disappearance of UFS's feeder services (as a third party common carrier) on these important trade lanes and our economy is now totally dependent on CMA-CGM's own feeder services. Their ships are small and they first ship out their own containers (being mostly transshipment containers) and only if space is available, will they load containers belonging to other shipping lines.

These small ships are constantly being overbooked and there have been delays of three to four weeks for a container to be loaded when the transit time is just five days. If there was a big problem last summer after EPIC and CP Ships left Malta for Cagliari when the FOI was up in arms and Prime Minister Lawrence Gonzi promised a remedy, but did not deliver, now there is a far, far bigger problem, and there is no solution in sight.

CMA-CGM as the Freeport new masters, are facing serious problems and I am quite sure that the Nationalist Government knows how serious the problems are but is keeping very quiet. To solve some of these problems Freeport are bending over backwards to entice UASC and its partners away from Gioia Tauro to Malta.

The Nationalist government must not ignore the mess it has created with the way it has mismanaged the privatisation of Malta Freeport. Before it is too late, serious steps need to be taken to address the problems hitting our importers and exporters so as not to make our social and economic crisis worse.

evaristbartolo@hotmail.com