The Labour Party has filed a motion in Parliament calling for the suspension of what it says is a new service charge on factories in government-run industrial parks.
The motion, filed on Wednesday by the party’s industry spokesman, Chris Cardona, calls for a wide-ranging consultation and a study to ensure the charge “is fair and justified”. It says the charge should be used for the maintenance and regeneration of the industrial parks without adding another financial burden on enterprises.
Dr Cardona notes in his motion that the service charge for companies based in industrial parks was introduced in the 1990s but was revised in October 2009. Under the new arrangement, handled by Malta Industrial Parks, the service charge would apply only to factories built after that month. The motion points out that the government has announced its intention to introduce a service charge for all companies in industrial zones, including those allocated an area before October 2009.
The annual charge will rise to €7 per square metre from 42c, amounting to an increase of between 57 and 93 per cent for a factory, according to the motion.
Describing the increase as “astronomical” and “insensitive”, Dr Cardona says it does not reflect reality and the enterprises did not believe it was justified. It would damage industry that was already facing a precarious situation in terms of competitiveness.
He notes that Malta Industrial Parks had raised the rent of factories by almost 100 per cent and calls on it to withdraw any agreements that included an increase or the introduction of a new service charge until the matter could be sorted out.
He calls for an impact assessment to be carried out on the competitiveness of factories, which he says are already faced with higher utility bills. The motion also proposes an association of tenants to evaluate the needs of the industrial zones. It would ensure that the contributions paid by the industry were equal and based on their needs and requirements and was not a hidden tax.
Reacting to the motion, Malta Industrial Parks pointed out that the majority of tenants were not paying any service charge while others were paying between 42c and €3 per square metre.
In October 2009, a series of revised charges – which had been previously announced by the government – came into force for new and renewed contracts, a spokesman explained.
In the Budget for 2011, the government had announced it would be enacting a law for the administration of industrial zones to create a fair and equal environment where the minority did not pay for the majority. The law would also regulate the concept of an association of tenants and the upkeep of the zones.
It said it was “obvious” that an equal service charge meant a better upkeep of industrial zones and insisted that the charge was solely meant to cover maintenance.
Malta Industrial Parks said it was operating against a “substantial loss” because the service charge was not covering the expense of maintenance.
It explained that there were intensive ongoing discussions with the Malta Chamber of Commerce, Enterprise and Industry on a draft legislation that would regulate an association of tenants and service charges in industrial parks, among other things. However, until such law came into force, the service charge would remain at €3.5 per square metre, it insisted.