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Kurt Sansone
Ports Minister Censu Galea yesterday insisted that government was “confident” that the reform process at the ports would bring about a “hefty” reduction in charges but stopped short of committing himself to the 25 per cent reduction promised on various occasions.
“Ideally, we would witness a global reduction of 25 per cent in port charges. I am confident that at the end of the reform process we will see hefty reductions, perhaps not 25 per cent, but hefty ones,” Galea told MaltaToday.
The minister was present for the official signing of the contract with the new cargo handling operator at Grand Harbour, who will be commencing operations on 1 July taking over from the General Workers’ Union, Cargo Handling Company Limited.
The new operators are Valletta Gateway Terminals Limited, a consortium made up of Portek Ports (Mauritius) Ltd of Singapore and TF Shipping Agencies Ltd, a subsidiary of Tumas Group.
The new consortium has a 30 year concession and is expected to cut tariffs by a token five per cent, a reduction, which was however described by Malta Maritime Authority Chairman Marc Bonello as a “bonus” given the investment the new company has undertaken to make.
As of 1 July the new company will also be responsible for all cargo handling operations in the port, which should also see further reductions in charges levied by shipping agents and cargo hauliers for the transfer of merchandise from ship to shore and within the port itself.
Valletta Gateway Terminals Ltd will be investing Lm5.2 million over the next three years, with a further Lm1.5 million for the rest of the concession. The consortium will also pay an annual fee of Lm350,000 to MMA and the authority will also benefit from a throughput charge of two per cent on gross revenue derived from the volume of merchandise handled at the port.
The new company will also contribute half a million liri for repair works the MMA will carry out at the Deep Water Quay in Marsa. Valletta Gateway Terminals Ltd will also lose the hefty revenue its predecessor used to make from the Freeport.
All employees previously engaged by the Cargo Handling Company Ltd will also be taken on board by the new company and any excess workers will be redeployed within the Tumas Group.
Asked by MaltaToday whether the minimal reduction in tariffs of five per cent was conditioned by the fact that the new company would be absorbing all the employees currently employed by the GWU company, Minister Galea said that one had no bearing on the other.
The minister said that absorbing all employees was not a condition in the tendering process.
“The reduction in tariffs charged by the new cargo handling operation is only the first step in a series of reductions to be brought about by the port reform negotiations with the various operators in the port. More reductions are in the offing,” Galea said.
MMA Chairman Marc Bonello said that Valletta Gateway Terminals will usher in new work practices and as of 1 July it will be responsible for all cargo handling operations in the port including the transfer of merchandise from ship to shore. Currently, cargo handling from ship to shore is the responsibility of the shipping agents, a service for which they charge importers, while transfer of cargo from the quay side to the stacking area is the responsibility of the cargo hauliers.
But Bonello yesterday warned that the MMA will be vigilant as to what charges various port entities will be charging since it will not tolerate a situation where current operators continue charging for a service they will not be rendering anymore after 1 July.
The new consortium is also bound to introduce a single all-encompassing tariff, which would simplify the complicated tariff structures importers and exporters have to deal with when utilising Grand Harbour.
Discussions with the other entities involved in port operations are ongoing and government is targeting the end of the year for the reform process to kick off in its entirety.
Apart from the tendering process for cargo handling operations, which was awarded to Valletta Gateway Terminals, port reform concerns shipping agents, cargo hauliers, port workers, telly clerks, foremen and other entities that make up for a complicated structure that has inbuilt inefficiencies and makes Grand Harbour an uncompetitive port.
ksansone@mediatoday.com.mt
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