Waiting for the reform

Malta has the highest port tariffs in Europe - fact number one.

Local industry imports most of its raw or semi-processed materials - fact number two.

Seventy per cent of our production is export-oriented, most of it finding its way out through our two ports, the one in Valletta and the one in Marsaxlokk - fact number three.

The Federation of Industry has always considered the reform in our port systems as one of the most important factors in our competitiveness. In an environment where manufacturing industry is being faced with increasing pressures to restructure and to keep its unit prices low, while at the same time having to absorb the huge increases in oil prices, competitiveness becomes a tricky game. Having the highest port tariffs in Europe is like trying to run the marathon with weights strapped to your feet.

2006 saw the beginning of the much-awaited port reform, something which has been the battle cry of the federation for the last decade. In anticipation of this reform, the minister responsible for the ports had publicly declared that this exercise should bring with it a reduction in costs of 25 per cent, thus placing our port tariffs a bit closer to those of our main European competitors. In its reaction the Federation of Industry stated that it would only consider this reform achieved once a real and effective framework was put into place to the benefit of all industrial sectors.

At the beginning of summer, the Malta Maritime Authority published new tariffs for the Valletta port and for the Marsaxlokk Freeport, which were announced as being the first step of the reform. The new tariffs brought with them some reduction in costs ... and a lot of ambiguity. During this phase, the federation kept in direct contact with all the stakeholders, including the Ministry for Competitiveness, and assured its members that, like any other change process, there was a phasing-in period which had to be followed. At the same time we urged the authorities to keep to their promised objectives.

As we approach the last months of what had to be the year of the reform, the situation is still nowhere near the established target. The federation fully understands that the process was partially stalled with the turbulence caused by the change of the port workers' union. On the other hand, we just cannot accept the fact that, for the last three months, no progress at all was registered in this absurd drama of waiting for the reform. Are we saying that all that needs to change today is subject to negotiations with the port workers and their representatives? What about procedural decisions that can be taken and implemented by the authority? One wonders why it has taken so long to take decisions. Is it possible that not everybody is realising that this lethargy is costing the manufacturing industry its own competitiveness and survival?

The minister went public and declared that the reform will be sorted out by the end of the year and that by that time his promise of reduction in costs will materialise.

The Federation of Industry will continue to support the reform process in all possible ways as it has done over the years. Too much time has already been lost in this waiting game. The clock is ticking away, and with it our opportunity to make our industry more competitive. Let's make sure we get it right this time round.

Mr Bajada is president of the Malta Federation of Industry.