Gozo Channel monopoly before European Court in May

The direct concessions the government granted to Gozo Channel in 2004 to run the ferry service will be scrutinised by the European Court of Justice in May.

The court has scheduled a hearing in Luxembourg to establish whether Malta infringed EU law.

Several warnings were sent to the Maltese authorities after the island joined the EU and, in 2008, Brussels took the issue to the ECJ claiming Malta failed to open the Malta-Gozo transport service to competition.

After a thorough investigation in 2006, the EU Executive found that Malta had not justified the need to conclude an exclusive public service contract with a private operator (Gozo Channel) to provide maritime services to Gozo.

Moreover, according to the European Commission, the contract was signed without a prior tender procedure offering all interested operators equal access to the market.

The Commission is arguing that the present monopoly enjoyed by Gozo Channel violates EU rules and the service, subsidised to the tune of over €3.4 million annually, should be allocated on the basis of a time-limited contract open to all interested parties in the EU.

According to EU rules, to apply the principle of freedom to provide services to maritime transport within member states, the countries must allow the operators concerned to function freely in the market.

The rules state: "Exceptions to this principle are only granted in special circumstances where market forces do not provide a satisfactory level of service."

An ECJ spokesman said: "We are now in the final stages of the judicial process and the Court has decided to hold a hearing so that both parties, Malta and the Commission, can make their last case on the issue before the judges decide.

"A hearing is not the order of the day in the ECJ system and is held either on request by one of the parties or at the Court's request to clarify some legal points. This time the hearing is being held at the Court's request," the spokesman explained.

The government disagrees with the Commission's position and although it is ready to issue a public call for tenders for a five-year contract it still feels there is only place for one ferry service between the two islands. Consequently, the Gozo-Malta crossing would still be operated by one company.

The disputed direct contract between the government and Gozo Channel was signed in April 21, 2004, only a few days before Malta's accession to the EU.