Sea Malta privatisation - June 29, 2005

Are industry's interests being safeguarded?

Following the government's decision to privatise Sea Malta, the national sea carrier, it has been made known that the company selected to operate the service will have to respect the conditions of a public service obligation agreement and will receive an operating subsidy to ensure that business and industry will have the same treatment as it receives at present.

Industry is keen to ensure that the services so far operated by our national carrier should continue and be further developed to the satisfaction of its customers - the business and industry sectors.

The Malta Federation of Industry has been, in the early years, critical of Sea Malta when it was created as a government monopoly because it overcharged its customers and created a cartel thereby eliminating competition.

But those days are history and times have changed. In the late 1980s, the government liberalised sea transportation and Sea Malta competed with a good level of service and at favourable rates for the business that was generated by industry.

Sea Malta came to be recognised as a valued partner for commerce and industry. It made a huge effort to understand the needs of industry and, through its able chairman of recent years, Marlene Mizzi, and the efficient management set-up, the service improved considerably. We must indeed acknowledge this and thank Ms Mizzi and her team for the good service they gave to their country, its industry and its economy.

A small island economy such as Malta's has particular needs. We fail to generate enough business to create a feasible business proposition for a sea carrier that serviced purely our local needs. Sea Malta carries our raw material from Europe, our dangerous but essential chemicals and gases and ferries trailers, empty containers and full trailer and container loads with finished goods to the Italian mainland for onward road transportation to markets in Europe.

Sea Malta managed, over the years, to turn itself around into a reliable service provider that satisfied all these needs with increasing efficiency, punctuality in sailings and understanding of its customers.

The FOI will not enter into the merits of how privatisation is being conducted by the government. But the federation is very interested to have a confirmation that the new private company that is taking over the national carrier will fulfill the public service obligations to their full extent and in the same manner Sea Malta has done so far. We expect the same efficiency and commitment.

We also expect that the new company will be receptive to industry's particular requirements and will be found ready to help industry overcome the inherent difficulties that a small island economy has necessarily to face. If changes for the better need to be made in the frequency of sailings, schedules, destinations, then we expect the carrier's new management should not rush.

Otherwise, it would be risking a destabilisation of industry's plans and the just-in-time arrangements that it has been operating over the years.

The news that the company in question is ready to meet the local business community and discuss their main areas of concern is heartening. The FOI is also predisposed to enter into consultation discussions, as the representative body for industry, with the new management.

The FOI must also make it clear it is the government's duty to make sure that proper monitoring of the company's activities should be exercised for the proper fulfillment of all obligations under its contract and that enterprise in Malta is adequately supported.

Mr Bajada is president of the Malta Federation of Industry.