The challenge of efficient and cost-effective links to, from and through Malta have always been a reality – in an economy that is increasingly demanding, the strain is more evident and needs to be addressed.
The lack of permanent links to mainland Europe increase operational costs for most businesses in Malta while the high costs in the country’s ports and excessive shipping rates keep on penalising them.
The five percent increase on domestic cargo at the Valletta Gateway Terminal effective since September 1, and the five per cent increase on import containers and 3.5 per cent increase on export containers at the Malta Freeport effective from October 1, are only the latest episodes of self-imposed burdens on the country’s competitiveness.
Due to the country’s size, geographical position and available economies of scale, Maltese firms that want to expand have no alternative but to do so abroad and this is rendered problematic bythe relatively high import- and export-related costs.
Commuters are spending a substantial amount of time every day trapped in gridlocks, which translates into a significant socio-economic cost
Local port charges still account, depending on the medium of transport used, for 20 to 40 per cent of the cost of shipping merchandise, making local transport costs disproportionately high. The last port reform did not achieve the desired impact on the cost of production and this continues to aggravate the unlevel playing field for Maltese operators in comparison to other countries in the internal market.
Therefore it is essential to direct funds towards an effective port reform to address the need for a reorganisation of port work practices and the associated cost structure, and ensure adequate infrastructure in a key connection node which essentially connects business in Malta to the international markets.
With regards to Air Malta, the Malta Chamber has consistently maintained that the country cannot afford to depend on foreign airlines, as Air Malta remains an indispensable asset for Malta’s entire economy. The Chamber made these views public on a number of occasions and has said that the national carrier is of extreme strategic importance for a large portion of the economy.
Beyond tourism, the airline offers a lifeline to the manufacturing industry. Reliable and timely supply of components and raw materials is essential to modern just-in-time manufacturing and integrated supply chains.
Pharmaceuticals, micro-electronics, electrical components and printed security documentation are all totally reliant on inward/outward airfreight.
Therefore, as a responsible organisation, the Chamber has called upon all stakeholders to abandon all practices hindering competitiveness and to focus on sustainability for Air Malta.
All parties involved should work to ensure credibility in Air Malta’s restructuring process and the utilisation of State aid funds granted by the Commission on a “one time, last time” basis.
Recent statements made by the Minister of Tourism in relation to the possibility of a strategic alliance with a larger carrier are welcomed as these are conducive towards placing Air Malta on a better footing post-March 2016.
Zooming in on the internal situation, there is little doubt that the seemingly increasing traffic jams in Malta are having an impact not only on people’s dailylives but also on the economy and onthe environment.
Much of the problems being faced today are due to lack of proper planning and organisation particularly with respect to public transport. In this regard, despite two major reforms costing millions of euros of taxpayer money, it can be safely said that commuters in general and workers are not confident enough to use public transport instead of their own means.
This problem intensifies the consequences of the lack of strong investment in proper long-term planning and in hard infrastructure.
As things stand, hundreds of thousands of commuters are spending a substantial amount of time every day trapped in gridlocks, which translates into a significant socio-economic cost.
The Chamber has recently gone on record to denounce a string of knee-jerk reactions by the authorities to the acute traffic congestion situation.
Consequently, it proposes that funding for an integrated traffic plan is included in the forthcoming budget. The study should consider Malta’s serious constraints and make holistic recommendations for sustainable transport solutions where various modes of transportation are seamlessly integrated to provide smooth mobility to people from all walks of life.
Government should consider making funds from the Individual Investor Programme available to reach this goal.
In conclusion, the Chamber is adamant that the situation needs urgent addressing. Challenges of transport in all of its forms and limitations cannot be accepted as a state of fact any more if we want the country to remain competitive and to experience growth.
Anton Borg is president of the Malta Chamber of Commerce, Enterprise and Industry.