Potential to increase traffic to Grand Harbour

Roll on, roll off (RoRo) traffic within Grand Harbour has the potential to increase by 50 per cent, according to Peter Darley, managing director of Valletta Gateway Terminals Ltd (VGT). But "the only way the company is going to grow" is if it can increase its container business.

Mr Darley told The Sunday Times last week: "We are experienced container people. I see we have a potential to expand RoRo traffic by 50 per cent, but we can expand container business by 500-1,000 per cent without even having an impact on the traffic going to the Freeport."

The "we" he refers to is Portek International Group of Singapore, which owns 55 per cent of VGT, with the Tumas Group owning the remaining 45 per cent.

Last July 1, VGT was given a 30-year lease of three parts of Grand Harbour: Deep Water Quay, which has 3.7 ha. of space but is a misnomer since there is limited draft and it has no crane carrying capacity; Magazine Wharf and Laboratory Wharf, which together have 5.2 ha. of space. This makes the land area "limited", he observed.

Among the equipment VGT has installed are an empty container handler that can stack the containers seven high, four RTGs - yard gantry cranes that can block stack containers five high and six wide, and two 45-tonne capacity reachstackers that also can stack containers five high as well as pick up RoRo trailers using 'piggy back' arms.

There are eight scheduled sailings a week of RoRo cargo traffic. Most of these have RoRo trailers, but there are also containers, vehicles (cars, trucks and caravans) and conventional cargo.

The Portek Group was founded in 1988 with headquarters in Singapore. The group is a global specialist provider of solutions to the port industry. It can deliver both capacity and productivity to port operators by enabling them to gear up and streamline their operations over a relatively short period of time.

Portek's range of competences includes turnkey engineering solutions, such as port equipment modernisation, modification and maintenance, equipment leasing and sales, and distribution of components and parts.

The group has six core businesses:

• port operations - it runs five container and multi-purpose terminals: three in Indonesia; one in Bejaia, Algeria; and the Grand Harbour in Malta. Total annual throughput is 680,000 TEUs;

• port equipment engineering;

• port equipment sales and lease;

• energy;

• crane spares and components; and

• port IT and security systems, including wireless radio data transmission systems, container terminal management systems and 3D computer simulation services to analyse and model port operations.

Listed on the Singapore Stock Exchange since March 2002, Portek has offices in 25 locations employing over 1,100 in 14 countries worldwide.

Mr Darley sees Malta as a node or hub for RoRo transhipment traffic. "Short sea RoRo has grown enormously," he observed. Most of the traffic that comes to Malta brings domestic cargo but he sees the industry trend to opening up more transhipment with north Africa. This includes RoRo trailers, some containers and cars.

With a small container ship visiting Grand Harbour once a fortnight, Mr Darley said that, apart from RoRo, this was a business VGT wishes to encourage.

VGT is preparing for the installation of two container gantry cranes to enable it to promote Grand Harbour as a multi-purpose terminal with reasonable productivity and profitability.

The company has a healthy relationship with the unions. "There is no animosity," Mr Darley said. Portek was assured that port reform would be concluded by the end of December. Yet the regulated charges being applied for transhipment containers is uncompetitive even compared to the Freeport, which charges Lm4.70 per container compared to Lm12.15c in Grand Harbour.

VGT recently become a target in the political arena in this election year, and a lot of ill-informed, incorrect statements have been made about VGT in the press recently. "I really don't want to enter that arena my- self," Mr Darley said. "But to give just one example, the previous concession holder at Grand Harbour was inefficient, and had made zero investment in facilities in previous years.

"It made a Lm400,000 operational loss in its final year, which after receipt of a levy of Lm800,000 applied to domestic cargo passing through the Freeport, work which it played no part in whatsoever, turned into a notional profit of Lm400,000.

"In the first month of our operation as our contribution to port reform, we reduced our tariff by five per cent compared that which was applied before.

"VGT is a private operator, is not in receipt of any handouts and is trying hard to turn our operations into a sustainable, profitable business in Grand Harbour for the benefit of its employees, shareholders, Malta and the business community in general.

"Port workers in Grand Harbour cannot keep up the service level and there is even a shortage of workers," he said.

The tariff of charges on cargo passing through Malta's ports consists of two parts: the regulated portion and the terminal operator portion. Each is roughly equal in the VGT operation, that means that half is regulated and passed on to the PWS (Port Workers' Scheme), and half is VGT charges, which it retains.

The regulated portion is applied by law, administered by the Malta Maritime Authority, and provides the income to the port workers. "It is an antiquated system, badly in need of reform, and very unpopular with port users," Mr Darley observed.

"Foreign importers wryly refer to it as the 'Malta Tax'. As it is a levy on notional tons of cargo that pass over the quay, in most cases it bears no relation to actual work performed. We receive many complaints, particularly from new customers, about the regulated charges we are duty bound to collect and pay to the PWS under this system."

On the positive side, Mr Darley said: "Grand Harbour is a special place in the world. We are there to operate a cargo handling business. Grand Harbour was always a hive of activity. We want to make commerce fit with the environment of Grand Harbour in an appealing way.

"You will notice that now the part of the port that we manage is neat, tidy and blends in with the environment. It would not look right if we were just a dead museum."

On the contrary, he continued: "We are a live exhibition in a museum and we contribute to the Maltese economy in more ways than people imagine. Malta offers a different culture and location, with unlimited potential in the transhipment business - more than enough for the Freeport and Grand Harbour combined.

"The world economy is changing and transhipment in the Mediterranean must evolve to meet that change. We see Malta as an interchange location for vessels of the same company, who would take advantage of Malta to move its cargo around as efficiently and quickly as possible."