Liberalise Gozo ferries

The monopoly enjoyed by Gozo Channel Co. is viewed by the European Commission as an infringement of EU regulations and the government was yesterday warned to remedy the situation if it wants to avoid having to go to the European Court over the issue.

Brussels also warned the government that a public service contract entered into with Gozo Channel just a month before Malta's formal accession to the EU is also in violation of EU rules and was carried out without a public call to tender.

The Commission said yesterday it has sent a reasoned opinion to Malta, the second stage of its legal proceedings, for failure to comply with Community rules on maritime cabotage.

After a thorough investigation, the Commission found that Malta had not justified the need to conclude an exclusive public service contract with a private operator (Gozo Channel) in April 2004 to provide the ferry service to Gozo.

"Under the regulation applying the principle of freedom to provide services to maritime transport within member states, the latter must allow the operators concerned to operate freely in this type of market.

"Exceptions to this principle are only granted in special circumstances where market forces do not provide a satisfactory level of service," it said.

On April 21, 2004, the minister responsible for Gozo Channel, Austin Gatt had announced that his ministry had drawn up a public service obligation contract with Gozo Channel, through which the government would subsidise tickets to the tune of Lm1.5 million annually.

Malta has been given two months to respond to the Commission's charges or to remedy the situation.