Port reform: let's get on with it... fast

Over the past several weeks we have noted with satisfaction a number of contributions to the print media on the need for port reform.

Competitiveness and Communications Minister Censu Galea has been in the forefront showing a sense of urgency about moving ahead with the much-needed reforms to make our ports more organised, more efficient and providing services to users of better quality at a much lower cost.

It was also interesting for industry to find the views of the General Workers Union, which is involved in the ports in more ways than one.

Those who follow with interest the local business scene will certainly remember that, for a number of years, the FOI, of which I am proud to be president, has been a lone voice repeating that industry was being penalised unnecessarily with the burden of extra port costs.

Importing raw materials and components from port, and exporting its products is a very costly part of industry's operations. Our federation has been insisting with Government that with all its complexity the problem at our ports needs serious and urgent attention.

Mr Galea is the first Minister for Competitiveness to go on record and consistently face the media squarely on this important topic. He is meeting stakeholders on port reform and looks determined to act.

This same determination is also very evident in the words of Prime Minister Lawrence Gonzi. Stakeholders, like the FOI, therefore have a duty to help find a fair but firm solution that will get the country moving forward.

Industrialists will pluck up more courage to invest if they are convinced that the country is prepared to implement the reforms that will help make life for the entrepreneur bearable. When industry reckons it is operating in a more predictable environment, it will invest and create jobs for our future generations.

There are still unanswered questions about how the government intends to proceed. In all fairness to stakeholders (both those who stand to lose and those who will gain) there should be a template of reforms.

Government should fix timeframes, generate a process to discuss the steps ahead with stakeholders and try to clear the hurdles that could be obstructing the process.

The FOI looks at our ports as the classic example of mismanagement, and division of responsibility to an extreme degree that exculpates everyone in the process from accountability.

One of the problems that the FOI would like to see resolved is to have the Malta Maritime Authority act as a regulator and not to be involved in the day-to-day management of Valletta port while having no visible jurisdiction at Malta Freeport.

We compare the situation of the various service providers at port to that of a team that has acquired an expensive set of football players that may be individually good performers but can't manage to win a game for their club because they have been allowed to ignore their team manager's pleas to make a collective effort.

Having said that, there are some positive signs that a new day is dawning on the situation. Government has shown its determination to act.

The GWU has indicated that it is prepared to play its part, although it has vested interests in more than one way: it owns Cargo Handling Company shares, it represents the interests of port workers, and even of self-employed persons like stevedores (burdnara) and tally-clerks.

The GWU is repeatedly stating that the problems at the ports are not occurring simply because of its presence as the only operator and as a trade union representing certain categories of workers, and that it is ready to play its part in the reforms needed for a smoother and more efficient operation.

However, it insists - quite rightly - that other interests also need to be serious and contribute to the reforms. Yes. The FOI agrees that the problem concerns several stakeholders and vested interests besides the GWU.

In the FOI's opinion our ports need one, two operators, perhaps even more, if it is at all economically feasible. This should be up for discussion to determine before privatisation of Freeport what is feasible and what contributes to healthy competition.

Should there be the same operator who will be responsible for handling local merchandise? Should there be special conditions imposed in the privatisation contract ceding the Freeport to a foreign company to ensure that local cargo is given the priority it deserves? What is certainly needed is total responsibility by one company or more operating our ports, of all cargo destined to arrive in, and exported from, Malta who will be able to quote a competitive rate per tonne of cargo comparable to that of other European ports.

Malta cannot afford to have service providers at port that get paid for work they don't do. Minister Galea was right to insist on this. But the FOI goes a step further on this road to port reform. No one should expect the consumer to pay for inefficiencies that one or more classes of service providers have foisted on them.

The consumer (and it is good to point out that industry is a large consumer) cannot allow sectional interests to perpetrate practices that are archaic, and do not make sense to anyone except those who have vested rights to continue robbing consumers because of some traditionally acquired rights.

Port service providers expect consumers to make sacrifices so that traditional practices convenient to them may continue. These sectoral interests cannot appreciate that industrial and business consumers are suffering on their cost structures.

Business operating locally might be able to pass on the port costs to the end consumer in the form of higher retail prices. That of course does carry a penalty that every stakeholder has to pay - cost inflation.

The situation for export industry will be to face claims for higher wages from its workers and at the same time face a more difficult situation in its export markets. The global marketplace has become so sensitive to price movements that firms exporting goods and services from Malta stand to lose markets if they only attempt to pass on our ports' inefficiency or our inflation to their overseas clients.

So those stakeholders at ports, who have sectoral interests as their top priority, are threatening the livelihood of the workers and the well-being of the economy of the country, if they resist change.

Their short-term personal gain will imply a long-term pain to all the rest. Malta is losing its competitiveness. The economy has not grown for three years, except for the higher contribution to GDP brought about by higher Government expenditure.

Every side of the social spectrum is currently engaged in finding solutions to the grave situation that Government finances are in. This situation is also raising costs for industry.

Unfortunately, Malta has collectively been exercising pressure on Government for more hand-outs when each citizen should be working harder, smarter and more efficiently to put the brakes on Government's high spending momentum.

My appeal goes to all stakeholders at port to work towards a more streamlined management system that should in the medium term create more work opportunities for the port service providers themselves while providing industry with support in their quest for competitiveness where they face great odds in the global marketplace.

Our enterprises are restructuring and investing hugely to be able to face the future with confidence. Their effort is not enough. The misallocation of resources in the economy, inefficiencies and wasteful public spending must be tackled urgently.

There is no time to lose on the country's reform agenda. The ports are a top priority area. Let's give port reform a start now to show that everyone means business.