Sliema car park mural completed in southern Italy
Market commentary: Deutsche Bank AG, Lloyds Banking Group earning...
Steering Gozo Channel | Paul Curmi
Newly-appointed Gozo Channel chairman Paul Curmi doesn’t lack the enthusiasm to be at the helm of the country’s oldest ferry service provider. But is he ready to face the challenges that lie ahead?
8 May 2012, 12:00am
With over 35 years of experience in the banking industry and a history of occupying different posts mostly dealing with the commercial community in Gozo, Curmi was appointed at the helm of the ferry service company following the resignation of former chairman Joseph Grech.
But what does he has to offer to a company that has so many challenges lying ahead?
Curmi doesn't beat about the bush about his lack of shipping expertise. However, he insists that his connection with the local business community is definitely an asset.
"Just to be completely frank, I am no shipping expert but I have found a strong team within the company on which I can always count for their expertise," the current HSBC area director for Gozo says.
"My hope is to build on the successes of previous chairmen and that through my experience, I can help put integrity, customer focus, performance driven and strategic focus as the company's priorities."
Big words, but it's an indication of Curmi's drive to steer the company which supplies Gozo's financial lifeline towards success.
He sees his present job and involvement in the community as a possibility to network with the business community and the civil society at large in Gozo:
"So I would very much like to see Gozo Channel Company nearer to the Gozitan community... and I cannot forget that I have the interest of the people of Gozo at heart."
Talking about being nearer to the Gozitans, I can't help but ask him about complaints raised by the general commuters over the services, who repeatedly complain about long waiting time and queues. But Curmi is quick to defend the company.
"It is only fair to state that this only happens on particularly long weekends and when Gozo becomes the hub for domestic tourism," he says.
The fleet is currently one ferry less, as the MV Ta' Pinu is having the necessary preparatory work done for the fitting of hoistable decks at the Palumbo Shipyard.
The ship is also undergoing necessary check that are done every two and a half years: "It is an investment estimated to cost approximately €4.5 million. The hoistable decks will allow the Ta' Pinu to cross the channel with more cars."
According to Curmi, once the double car deck is installed and in use, the ferry will be able to double its vehicle carrying capacity from 85 to around 155 cars.
This, Curmi adds, means that Gozo Channel Company will have two vessels - Ta' Pinu and Malita - with double hoistable decks: "This way we will be reducing the waiting time for car passengers at both the Mgarr and Cirkewwa harbours."
But will a second ferry carrying more cars appease regular commuters who have decried the removal of the 6.30am trip, that has left a 45-minute gap between one trip and another? Frustrated commuters have written in local newspapers several times to explain how the 6.30am trip was "very convenient and necessary".
"Gozo Channel Company provides an essential service to Gozitans, and so we are very aware on the need to continue improving and potentially increasing the number of trips between Gozo and Malta," Curmi says, whose comments will probably be received with praise by the daily commuters.
He explains that the 6.30am trip is scheduled only on Mondays - excluding public holidays - which together with the 7am Monday trip, is replaced by a trip at 6.45am.
"So it's not that the trip is being 'removed'..." Curmi insists, adding that proposals and requests to revise and increase the ferry schedules are "a regular occurrence which the company does take note of and evaluates".
According to the Chairman, the Gozo Channel has in hands some "interesting" proposals that it would not use, if these did negatively impact on the overall viability of the operations.
"One must also not forget that the company is bound by a PSO (public service obligation) contract that stipulates the number of daily trips... and we have to follow this assiduously."
He explains that making changes to the morning schedule will inevitably affect other trips "which will solicit similar criticisms".
Government's award of the PSO to the Gozo Channel Company in 2004 by means of an exclusive Public Service Contract, had raised alarm bells by the European Commission, who claimed that Malta had failed to fulfill its obligations under a regulation of the European Economic Community.
The EC had said that contract, which provided Gozo Channel with a monopoly over the ferry service, was in breach of the EU's strict competition rules.
But in 2010, the European Court of Justice dismissed the action brought by the EC against Malta for the alleged failure to fulfill its obligations on cabotage services.
Later on during the same year, government issued a public call for offers for the operation of the ferry service between Malta and Gozo, with the sole bidder being a consortium, the Gozo Channel Transport Joint Venture, made up of the Gozo Channel - which operates the service - and the Gozo Ferries - which owns the boats.
The agreement covers between 2012 and 2017 as the PSO also covered free channel crossings for the elderly and subsidised the Sa Maison crossings.
But during the signing of the PSO agreement with Gozo Channel, Finance Minister Tonio Fenech said that government had reduced its subsidy to €1 million a year to finance lower fares for Gozitan residents and free trips for the elderly.
During 2011, the subsidy had been around €5.5 million. Still, Fenech had said, Gozo Channel will not increase its ticket prices to make up for the difference as it underwent internal restructuring that enabled it to become more competitive and efficient.
According to Curmi, the restructuring included the discontinuing of loss or non-core operations, enhancing internal controls, increasing efficiencies and exploiting the economies of scale, which will not be possible through the investment in the hoistable decks on the MV Ta' Pinu.
"Simultaneously, the company will also be trying to enhance its revenue-earning potential in areas that were not fully exploited as effectively in the past," Curmi says.
With regards to the ticket prices, the Company's fare structure is bound by Legal Notice 314 of 2004 [Gozo Passenger and Goods Services (fares)] Regulations and thus it cannot increase any ticket prices on its own accord.
But while Gozo Channel was given an exclusive operation on the Cirkewwa-Mgarr route, the agreement does not preclude any other operator from providing a service from or to other ports, which included Cirkewwa and Mgarr, Fenech had said.
Keeping in mind those travelling without a vehicle, will this affect Gozo Channel in any way?
According to Curmi, the Gozo Channel Company was not given an exclusive operation on the indicated route.
"A few small operators continue to ferry people between the two islands, offering a 'different adventure' of travelling by a small craft," Curmi says.
"On the other hand, Gozo Channel still continues to offer a competitive advantage over these operators in terms of reliability, availability, safety, quality of service and more."
In case of large operators, Curmi adds that one must always bear in mind the terms and conditions of the PSO contract, even insofar as the technical qualities of vessels are concerned.
Recent statistics published by the National Statistics Office have shown a drop in the number of people crossing between Malta and Gozo in the first three months of 2012. When compared to the same period last year, the drop was marked at 2.9%.
Is Gozo Channel working on any plans or measures to reverse this trend? Curmi's first thought goes towards the business community...
"Commuters are not only important for our company because they provide us with our main revenue, but they are also very important for the commercial community in Gozo," Curmi says.
But he also puts the onus of the decrease on the ongoing road works in both islands: "The ongoing road reconstructions works at the north of Malta and in Gozo - coupled with extremely bad weather during the first two months of this year - helped very little to attract commuters to Gozo."
Curmi is adamant that the decline in commuters during the first quarter was beyond Gozo channel's control.
"Nothing has changed in our operations over last year. On the contrary, we are investing in our ships to make the crossing faster and more efficient. So, like all the business community in Gozo, we are eager to see the current infrastructural works completed in earnest so customer confidence in enjoying a comfortable journey from Malta to Gozo increases," he says.
Yet, commuters coming from all walks of life and business industries have repeatedly called and insisted on different methods of accessibility to the sister island, which would not be related solely to see crossing.
Does this worry Gozo Channel? Is this an indication that the commuters are not satisfied with the services offered by the company that has been running since 1979?
While he acknowledges that commuters' demands vary and change, Curmi refutes the notion that the company is failing its clients.
"Gozo Channel has improved the accessibility between the isles in no small way," he insists.
"Were it not so, today the company would not be able to carry over four million passengers annually making it the largest transport carrier by number of passengers in Malta... this is no mean feat!"
Curmi then concedes that change has and will always be inevitable: "We therefore need to adapt to new consumer patterns, and improve the quality of life of our citizens."
Just like any other company, Gozo Channel must also face its financial challenges. Last year, Sunday newspaper Illum reported that the Gozo Channel crew of 239 was reduced by seven people between 2009 and 2010, resulting in a decrease of 6% in administrative expenses. This reduction had increased the company's intake to over €2 million - before taxes.
At the same time, the Gozo Channel's directors had reportedly earned €54,146 more than the previous year.
Are there enough crewmembers to man the ferries?
"It is too early for me to comment at this stage," Curmi replies. "I am presently undertaking an assessment and an evaluation of every unit within the company."
On the directors' pay increase, Curmi said there was no increase: "Following the resignation of the previous full-time CEO, the chairman of the company assumed the duties of the CEO and what was previously an administrative expense in the accounts became classified as remuneration to one of the directors."
Perhaps in 10 years' time at the earliest, the Gozo Channel Company will have to face the competition of a new, completely different competitor: the tunnel service.
After being talked about since the early 70s, last week government published its pre-feasibility study. According to the preliminary report, the underwater tunnel is doable as it would be both physically and economically viable.
The tunnel could cost anything between €150 million and half a billion euros and it would take approximately seven years to build.
Meanwhile, government has also spent around €30 million in the regeneration and reconstruction of the Mgarr and Cirkewwa passenger terminals.
Curmi worried that a tunnel service would negatively impact the services provided by Gozo Channel?
"It is very premature to comment at this stage on what could happen," he says diplomatically.
"A feasibility study still has to be produced and the preliminary report indicated around seven years for completion of such project."
Again, Curmi brings in the Public Service Obligation that runs for a six-year period.
"One would need to look at what requirements will the news PSO include... evidently it is clear that the availability of such a tunnel would require less crossings.
But other than that any other conclusions would be too premature at this stage," he says.
Curmi's optimism and trust in the Gozo Channel Company do not falter.
"I am confident that there will be a number of options.
"Because travelling by boat across the channel would remain an experience in itself, which cannot be replaced by travelling through a sub-sea tunnel."
This interview appeared in GozoToday
Miriam Dalli graduated in communications studies from the University of ...
Court & Police
Updated | Man grievously injured in Gzira accident...
Court & Police
Businessman accused of raping woman several times ...
Updated | Malta among lowest youth unemployment ra...
Court & Police
Judge allows cocaine courier to be tried by the in...
Court & Police
Murder case delay ‘not my fault’ says former p...
Court & Police
Police officers ordered to declare all financial, ...
Market commentary: Deutsche Bank AG, Lloyds Bankin...