Limbo in port reform

At first glance, the subject of port reform might seem remote and very boring, except for those who work at the ports and use them for their daily living, but a closer look reveals that the management and costs of ports matter to ordinary people like you and me. Why? They have a direct effect on our cost of living and help to reduce or increase prices.

So much hype has been pumped into Government's proclaimed port reforms and the substantial cost reductions that had to be achieved, but with two years having gone by it is pertinent to take stock of what has been achieved. This is important because port costs do not only determine industrialists' competitiveness, but the effect feeds into higher inflation and therefore raises the cost of living for our people.

Regrettably, port charges have not been reduced at all, so last month I tabled a parliamentary question and got a curt reply that says nothing. Constituted bodies, the Federation of Industry (FOI) in particular, are so exasperated that industrialists have lost heart that any meaningful reform will ever take place and have attached no importance to the Prime Minister's empty promises on port reform. Yet after all the events that occurred behind the scenes, quite the opposite results have emerged that are shackling our economy and impinge on the cost of living.

Attached firmly to the predicament endured by industrialists by way of uneconomic costs, is the fact that the expansion of shipping services, that our island economy needs so much and that was promised by PM Gonzi with Freeport privatisation in 2005, has yet to occur. On the contrary, entrepreneurs and international truckers today have found themselves to be totally dependent on a handful of shipping companies for their export or import shipments while our arterial ports are firmly embedded in the hands of a private monopoly.

True reform is meant to produce higher efficiency and lower costs through greater competition, but for reasons that Government does not disclose, it has embarked on this exercise in an unorthodox way that enabled interested parties to carve their own niche within the port workings, without regard to what should be the ultimate goal in the national interest.

What transpired since July 1, 2006 is that on this day Government allocated local cargo according to which port handled it and in so doing Freeport took over a big chunk of our imports and exports that hitherto was within the control of the Cargo Handling Co Ltd. In addition, Freeport also took over the handlings on board that had been within the province of shipping agents.

With this redistribution of business, and the resultant obvious earnings, Malta Maritime Authority's (MMA) authority was diluted and Freeport Corp became more predominant, but in all the framework of the port reform nowhere is the latter authority heard to instigate the much needed reform.

Our country deserves better

Government could have started the reform with the Freeport where the greater concentration of traffic lies, and allowed substantial reductions to filter down to port users through a competitive mechanism. The new terminal operator in Grand Harbour is in a totally different ball game because of the restrictions it works within, and could not be expected to produce the same cost savings as Freeport.

Yet, for reasons close to its heart, Government set about its task by establishing uniform port tariffs that had so often been criticised and in so doing stifled the reform process and the possibility of reduced tariffs. Seasoned port users are aware that parallel tariffs applied at Freeport can effectively support price reductions on domestic cargo by as much as half and bring about real reform, but two years into the process, these avenues are not on the government's agenda.

Rather than tackling the real problems, the Prime Minister unfairly attacked port workers as though they alone are the cause of high costs. The protests by the Malta Chamber for Small and Medium Enterprises (GRTU) president on TV some time ago about new and existing charges that were raised by Freeport are still there, and do not feature in the port reform process.

To crown it all, shipping agents that are well connected have added their fees which are higher for doing less than what they earned when they did more, while two foremen of port workers that have excluded their colleagues at the Freeport, rake in substantial amounts through their monopoly. All the increased charges that have been criticised so often, originally even by the MMA, are allowed to continue, and this does not bode well.

Within the context of what has in reality happened, the question is whether the PN government has designed its strategy to actually embrace the current decadent arrangements, as it is difficult to comprehend why no changes have occurred despite two years of useless efforts by port users.

With a year to the next general election, will the port reform be made by then? Surely, our country deserves better!

evaristbartolo@hotmail.com