Consumer protection is an important cornerstone of EU legislation especially now that economic growth seems to have stalled in most member states. In small economies there are some ‘natural monopolies’ that unless properly regulated can cause serious damage to the well-being of consumers. In Malta there are quite a few such monopolies and their regulation very often leaves much to be desired.
The Valletta port operators enjoy duopolistic privileges together with the Malta Freeport operators in the handling of cargo. Both are private operators that replaced the General Workers’ Union, which used to carry out cargo handling services in this country.
When Valletta Gateway Terminal took over the cargo handling of ships using the Valletta port, there were high hopes and official reassurances that the already exorbitant cargo handling charges would not be increased and that possibly they would be reduced through more efficient operations.
It seems that this commitment, like many others that promised a better deal for consumers when new regulatory bodies were set up, was no more than pie in the sky. Ordinary citizens rightly feel betrayed when regulators are unable to protect their interests.
The Valletta port operators announced to their clients that as from September 1 they would increase their tariffs for handling cargo in the Valletta port. The increase of 2.6 per cent in the tariff may seem modest, but, when one considers that the actual rates are already among the highest in Europe, few would deny that such an increase was not in the best interest of consumers.
“For just cargo handling – which means the simple operation of unloading a container from a ship on to the quay – we will have to start paying €327. This is more than we pay for bringing the container all the way from Italy.” This comment, made by an upset importer, shows the extent of unjustifiable practices that have been allowed to survive for decades despite growing awareness of the need to protect consumers from monopolistic malpractices.
Malta Transport Authority as regulator was initially reported to have approved these increases. Why would Valletta Gateway Terminals go public and announce the tariff increases if they did not at least have tacit approval from the regulator?
The transport watchdog took some time to rebut the claims that it had approved the requested tariff increases and gave the impression that the matter was still under consideration at least until the operators present “a relevant business case and a study analysing the impact of an increase in tariffs”.
The initial silence of the regulator jars when one considers that the Prime Minister recently declared that “port rates should go down as we are losing our competitiveness”. Is this another case of the right hand not knowing what the left is doing? Unless the government comes up with a reasonable explanation for measures that hurt consumers, the credibility of its political will to improve Malta’s competitiveness will be shaken.
If there is one thing worse than a public monopoly, it is a private one. Importers and exporters using our only two cargo ports to transport their goods have no real choice on who they appoint to handle the cargo as this market is not competitive. The least the government can do is ensure regulators treat people more sensitively.
At the end of the day, it is the prime responsibility of regulators to protect consumers from abusive practices of both public and private monopolies.