Among the many EU directives on State aid, there is the directive known as the Community Guidelines on State Aid to Maritime Transport (97/C 205/05). This, Dr Farrugia said, allows State aid to national shipping companies as long as they also operate internal transport.
The Italian shipping line which comes to Malta, the Grimaldi Line, services both internal Italian routes, such as from Italy to Sicily, or Pantelleria or Sardinia but also from Genoa to Tunis.
It is this double range of its services, Dr Farrugia said, which enable it to get Italian State aid.
Similarly, he added, the French SFCN, receives French state aid.
So if Sea Malta is merged with Gozo Channel, he argued, the resulting shipping line would be able to carry on both the internal shipping connections between Malta and Gozo and also Malta’s international links, and obtain State aid in addition. “We can do it like the Italians and the French do,” Dr Farrugia said.
He added that Sea Malta’s accumulated losses over the past six or seven years amount to some Lm6 million. But this government has been in office since 1987, bar 22 months, so why was the situation not redressed earlier and restructuring done in time he asked.
If there are any excess workers, and he personally feels there may be, this is the fault of two ministers who give employment to people there on the eve of every election.
Dr Farrugia also claimed that the losses can also be ascribed to wrong ministerial decisions. When the Maltese Falcon or the Malta Express need some repairs, they get quotations from ship-repairing yards all over the Mediterranean, such as Palermo or Trapani, but then the minister orders that the repairs be carried out at the dockyards in Malta.
An agreement between Sea Malta and the Grimaldi Lines stipulates that each can only carry up to 80 per cent of the market share from Genoa. This is where most of Malta’s raw material, such as cloth for jeans, iron, spare parts and other raw material, comes from. This is a very good arrangement, he agreed, but this is possible only between two national lines. It does not seem that such an agreement would be possible with a private line and could mean that Malta would lose its competitive edge even more on its links to mainland Europe.
The other route utilised by Sea Malta, the one from Marseilles, was scathingly described by Dr Farrugia as “empty ships with just one or two containers, containing hamburgers”.
He claimes that there is a major scandal involving duty free fuel which is being carried out under the noses of the authorities in Maltese territorial waters and even in Grand Harbour!
The government knows about this, he claimed, but is doing nothing about it. He declared that bunkering ships anchoring near or in territorial waters are supplying duty free fuel to those who should not get it, even private yachts, small ships from Sicily, catamarans and others. This is losing the government, at a conservative estimate, he said, at least Lm0.5 million a year in duty. This is money which could be used to shore up both Gozo Channel and Sea Malta. The only sales of duty free fuel that can be allowed now that Malta is in the EU, should be to ships travelling in international waters and not to ships or vessels sailing between EU nations.
Another argument against the dismantling of Sea Malta concerns the national shipping line’s past relations with mariners. Over the past years, all the people who trained as ship captains or in the various other fields of sea service, especially at the proper MCAST college, worked and were subsidised by Sea Malta, including all the captains at Gozo Channel and those employed in the pilotage and bunkering trades. Would a private owner be bothered with such a social responsibility, he asked.
Finally, in case of war in the Mediterranean, would a private ship owner bother to risk his ships and continue servicing Malta, or would Malta end up cut off from the rest of Europe?
All this, Dr Farrugia said at the end, should not be construed as any criticism of the Sea Malta chairman or her board. On the contrary, all through, they did what was right. However, he questioned this sudden hurry to sell the shipping line and who stands to benefit from the shipping line’s privatisation.