Two new tug boats on order

Tug Malta will next year take delivery of two new tug boats at a cost of Lm4.5 million.

The bigger of the two tugs, ASD TUG 3111, is expected to arrive in February while ASD TUG 2411 - which is seven metres shorter - is expected at the end of 2006.

The tugs are being built by Dutch company Damen, which Tug Malta chairman John Sullivan said was the most cost-effective they had found.

Tug Malta has obtained a 10-year loan to cover the cost, which is covered by mortgages on the two new tugs. Mr Sullivan stressed there will be no counter guarantees or letters of comfort from the shareholders, which include the government.

Asked during a news conference whether the two boats could have been built in Malta, Investments Minister Austin Gatt was quick to answer that while in theory this was possible, in practice it was not.

He said experience had shown that if built in Malta the cost would be much higher, adding that this was what had happened when the Gozo ferries were built here.

Moreover, Mr Sullivan added, Damen had a lot of experience in building such tug boats.

The two boats have identical engines, making repairs more cost effective. The bigger boat will have a raised bow, which would enable it to work in waves higher than 1.5 metres, while the other can manoeuvre in restricted areas.

Dr Gatt expressed the government's trust in Tug Malta and Mr Sullivan, adding that the company was operating the way a company should. It had made a profit almost every year since 2001. While it made a loss last year, it is expected to make a profit of Lm0.5 million this year, going up to Lm1 million by 2010.

The minister explained that last year the company increased its tariffs but still remained the most competitive in the Mediterranean. It had the cheapest tariffs among Mediterranean ports including Barcelona, Livorno and Genoa.

Moreover, ships owners whose vessels regularly call at Malta and utilise Tug Malta's towage services could avail themselves of tariff rebate contracts as from last January. Mr Sullivan said these make towage rates in Malta even more competitive.

However, few ship owners were taking advantage of these rebates and he urged them to do so.