The process of structural reform that has been initiated within the Malta Maritime Authority continues to gather pace, with its impact being felt not only within the Authority itself, but also in the various economic sectors in the maritime community. The reform process has been spurred by two main factors:
Firstly, the need to ensure adherence to the EU aquis in the field of maritime transport, particularly in areas directly related to ports and merchant shipping activities. This brought about various changes in legislation and increased efforts to provide for an adequately trained staff capable of responding efficiently to the additional responsibilities associated with the obligations of membership in the enlarged European Union.
Secondly, the need to enhance the overall level of competitiveness particularly in our ports beset as they are by high costs and outdated work practices.
In response to the changes in the wider international and local economic scenario as well as due to Malta’s accession into the EU, the various directorates within the authority have continued with a process of adjustment aimed at strengthening their internal structures to ensure that these are not only capable of meeting these challenges but, just as important, to ensure that these can be carried out in a cost effective manner.
1. Centralising corporate functions
In this regard, work continued on the gradual implementation of projects aimed at centralising corporate functions to remove any overlapping tasks and processes, thereby reducing costs while enhancing efficiency. Various measures have been taken to streamline operations in a number of departments, including the redesign of work processes and the redeployment of staff, even as new functions were being created.
As the importance for a more flexible and streamlined workforce increases, emphasis is being given to greater training of staff at all levels and the year under review can be considered a record in the number and variety of training programmes that were initiated, given also the financial assistance extended by the EU in this regard.
We have embarked on a more proactive management. Within the development sphere, a strategic programme of in-house training modules were effected for a number of employees. These initiatives are helping the authority maximise its human resource strengths and potentials, while at the same time helping to scientifically rationalise human resource capacity and utilisation in meeting new operational demands.
2. Safety and Security at Sea
i. Pollution prevention and the safety of navigation in local waters
In the former case, this past year has been mainly characterised by the Ports Directorate’s efforts at transposing the relative aquis and international legislation related to pollution prevention and the safety of navigation in local waters. The authority is actively involved in the Maritime Security Committee headed by the Competitiveness and Communications Ministry. Through the participation and cooperation of various organisations, including the Police Force, the Armed Forces of Malta and Customs, a greater coordination in related spheres of activity will be brought about by the parties
concerned.
Several initiatives, headed by the Malta Maritime Authority, were instrumental in the successful implementation of a number of security provisions that led to the certification of the IMO ISPS Code directives and also the EU maritime security recommendations.
ii. Security measures
The Maritime Security Compliance Department was also established to take up the regulatory function and monitor all the national and international security obligations falling under the remit of the designated authority. New legislation was also drafted and is currently being discussed. A number of new committees relevant to this issue were constituted to help coordinate a wider network within the sphere of maritime security on a national basis. A number of projects have been given the green light and a holistic framework for enhancing the awareness of maritime security risks has been prepared.
A number of berthing assistants have been redeployed within the Security Department and a
rationalisation exercise is being carried out that includes a re-
evaluation of manpower needs. This is being carried out in order to be in a better position to address future legislative requirements through an organisational structure that embraces a wider
concept of maritime security and increased awareness of maritime security risks. In view of the above, a number of training
initiatives are currently underway. In the years to come, a number of projects relevant to this section are planned, where it is envisaged that a wider concept of maritime security will be embraced.
iii. Ship inspections
Inspections were intensified to verify compliance by commercial vessel operators, terminals, vessels, port users and service providers with local legislation. Port officers have continually inspected equipment and procedures, both on shore and on vessels, in order to ensure that all parties carry out their operations in a safe and environmentally-friendly manner. In cases where the terminal or vessels were found to lack any of the requisites of the inspections, these inspections have been followed by discussions with the managing organisations.
Follow-up inspections to such sites are subsequently carried out in order to ensure that the areas at fault are rectified. As these inspections become standard procedure, and the directorate experiences more interaction with the industry, there is more cooperation between all the parties concerned in an endeavour to instill a culture of pollution prevention and safety standards.
3. Port activities
i. A growth in activities
The ports of Valletta and Marsaxlokk continued to experience a contained growth in their activities. This results from the number of ships calling at our ports and territorial waters and the throughputs of cargo handled. Additionally, providers of services in our ports, ranging from ship-repair to ship handling and bunkering, registered a sustained increase in their operations. These results are considered to be significant.
Increases in container handling did not match the growth experienced in other competing Mediterranean ports. This could be attributed to an inherent lack of capacity, low productivity levels and anachronistic work practices employed by service-providers who enjoy exclusivity.
Passenger activities were re-dimensioned in view of recent developments in the industry. The most recent information available indicates that cruise passengers for 2005 are expected to surpass those of 2003. The establishment of the Malta Cruise Network should provide the required
synergies in order to reach the established goals.
Other important legislation focuses on the provision of waste reception facilities in ports for ship-generated waste and cargo residues. This would ensure that each terminal develops its waste management plan subject to the approval of the Ports Directorate, in consultation with the Malta Environment and Planning Authority.
ii. A ports development plan
Given present initiatives to further involve private participation in the management of our ports, and following the recent lease agreement for container terminals at Marsaxlokk, the ministry, in collaboration with the authority, is leaving no stone unturned in the implementation of a ports development plan.
In line with the guidelines identified in the Grand Harbour Local Plan, the authority has carried out a survey of the areas around the port of Valletta that could be identified for port commercial activities. In order to maximise the potential of the port as a multi-purpose facility that could attract niche market activities, considerable investments in infrastructure are required. A number of port infrastructure development projects are being considered which together will form the basis of a national port master plan. These projects include the development of Barriera Wharf, the upgrading of Deep Water Quay and Flagstone Wharf, Bridge Wharf and the alignment of Laboratory Wharf to Coal Wharf.
In parallel, the authority is actively involved in the development of the short sea shipping concept and is also actively participating in the development of the Motorways of the Sea, particularly now that “feedering” is considered to be a component of the Motorways of the Sea. The authority is in the process of setting up a Shortsea Promotion Centre and represents the ministry in discussions with other Mediterranean ministries and port entities.
The main objective focuses on the improved competitiveness of the ports, to further penetrate their regional market share, given current and future opportunities. However, this can only be met if all the industry’s players realise the long-term benefits that will result from enhanced collaboration among all the stakeholders and from the gradual materialisation of the infrastructural projects that have been identified for the ports.
iii. Port reform
When one takes a look at the work practices of service providers within our ports, the conclusion to a logical and studied examination is that many of these practices are outdated, and no longer needed by modern demands. Putting it plainly, decades ago, the cargo of a vessel calling at our port carrying sacks of cement would be individually unloaded by a gang of 20 people or more.
Now that technology has taken over, this manpower practice is no longer carried out. And yet we still pay for that service today, even though the gang does not physically do the job. The success of port activities can be achieved if a high quality of service is delivered, a close relationship with end users is maintained and the use of available resources is optimised.
It is ultimately the service-providers who should ensure the smooth running of port operations, providing value for money and reasonable charges for their services. Perennial difficulties have existed in the port of Valletta due to the segregation between ship and shore operations. It is unreasonable to expect the consumer and our local industry to foot the bill for such irrational practices.
Certain traditional service provisions within the ports are no longer required or used, as we have modernised over time, but they are still charged for. We are insisting on a strategy whereby a modern operational system is in place, which could also possibly absorb these workers. Our vision is to enhance the efficiency of our ports, resulting in a competitive working environment.
After all, we are in the midst of competition, and I am sure we can take no pride in being one of the most expensive ports in the Mediterranean region. I have constantly maintained that reducing overall tariffs does not necessarily mean a reduction in the income of the various individuals who offer a service within the ports. On the other hand, I have always stressed that if we succeed in delivering a high quality service at competitive rates, the workload could increase as a result of more vessels being attracted to Malta, with a potential increase in income.
A steering group, reporting directly to me, has been appointed in order to lead negotiations with the pertinent sectors of the ports and these are now at a very advanced stage. The steering group has as its terms of reference the conclusion of a new agreement in order to reform and revise present work practices and conditions, organisations, licences, tariffs, regulations and other legal provisions relevant to operations within Valletta port. I have instructed the steering group to conclude negotiations within reasonable time parameters in order for government to be in a position to implement a good chunk of the reform in the first few months of 2005.
4. Maritime economic
activities
Ports-related maritime economic activities have continued to expand, albeit at a more subdued pace, given the prevailing international and local economic scenario. It is hoped, however, that as the ports reform process intensifies in the coming months, the benefits that will accrue will lead to a more sustained expansion aided by the declared intention of the new management at Malta Freeport to double capacity and improve productivity. In anticipation of this, the authority is actively considering a number of infrastructural development projects within Grand Harbour which would expand facilities and rationalise the use of the limited space available.
i. Shipping traffic
During the year starting October 2003, the number of ships calling in Malta increased by six per cent. The composition of the traffic gives very clear indications that the number of vessels calling within territorial waters for a particular service, without entering a port, has continued to register the fastest growth.
While cargo vessel numbers have maintained the same level as the previous financial year, there has been a fall in the number of cruise liners calling in our ports. This may have been the result of a number of factors, but the fall will be far less than that anticipated at the beginning of the year. The reason for this is that some of the main cruise operators have increased the number of calls being made in Malta.
Moreover, the bookings received for next year show that Malta will again experience a substantial increase in cruise traffic. The completion of the new cruise and ferry facilities will definitely contribute to increasing hubbing operations in Malta.
The number of passengers using ferry services from Grand Harbour again increased by 15 per cent. The increases registered during the last two financial years have reversed the downward trend registered during the previous six years.
This year has again seen another increase in volumes delivered by the bunkering industry in Malta, not only in our ports but also within the anchorage areas which are located within our
territorial waters.
ii. Cargo throughput
The cargo throughput statistics reported in the annual reports of previous years exhibit a consistent trend in the way conventional cargo is giving way to containerised cargo. All other cargo sectors, whether for local consumption or for trans-shipment, have experienced a growth. For example, unitised cargo increased by about three per cent, dry bulk cargo by two per cent, liquid bulk cargo by 11 per cent. Unitised cargo registered an increase in volume in both ports, with Valletta acquiring an increase of 10 per cent in business destined mainly for the local market. Wet bulk cargoes increased mostly due to the increase in fuel oil imports.
5. Registry of ships
Despite a difficult shipping market worldwide, and further tightening of controls, between October 2003 and September 2004, 643 vessels totalling 3,331,348 gross tonnage were registered.
These figures include 38 re-registrations for a total gross tonnage of 161,577. During the same period, cancellation of registration was effected in respect of 349 vessels for a total gross tonnage of 5,456,065. This included 66 single hull tankers, for a total gross tonnage of 2,653,374, which are deemed to be an environmental threat. Following EU discussions, it has been decided that European ship flag states should cooperate further in the removal of such vessels. Furthermore, during the same period 15 merchant vessels with a total gross tonnage of 70,000 were not accepted for registration.
Analysis of these statistics reveals:
• 89 deletions for a total of 1,116,692 gross tonnage in respect of ships of 100 gross tonnage and over, aged 25 years and over;
• 47 cancellations representing 44,889 gross tonnage effected following the continuation of an exercise to terminate the registration of vessels that could no longer retain their status as Maltese ships and
• three deletions for a total of 7,882 gross tonnage for technical non-conformity. It is to be noted that some of these deletions may fall under more than one category.
i. The second largest register in Europe
At the end of September 2004 the number of ships registered under the Merchant Shipping Act was 3,660, with a total gross tonnage of 24,539,986, which makes Malta the second largest register in Europe and one of the largest registers in the world.
The average age of all vessels registered during this same period was 11.1 years – a figure which increases to 12.32 years for ships of 100 gross tonnage and over. On the other hand, the average age for deletion of registry was 18.7 years, with ships of 100 gross tonnage and over averaging 20.14 years.
ii. Quality shipping
These statistics are a clear indication of the policy adopted by Malta’s flag administration to focus on quality shipping and ensure that ships with a poor detention or safety and marine pollution record do not operate under the Malta flag. Malta is not a flag of convenience.
The directorate is confident that eventually any overall loss in tonnage will be recovered as the Maltese register continues to gain credibility and attract more ship owners who are looking for a flag that inspires confidence and reliability. The Maltese authorities continue to maintain that growth must not be at the expense of quality and, that growth can be attained through quality.
ii. Merchant shipping computerisation
In addition, but funded entirely by the MMA, is the E200,000 computerisation of the ship registry within the Merchant Shipping Directorate which has now entered the final stage of implementation. This consists of extensive parallel runs after having completed the input of all historical transactions related to ships currently on the Maltese Register of Ships.
The authority also concluded the project plan for the maritime sector under the transition facility programme 2004, amounting to E1 million. This project covers training, procurement of computer equipment, software, specialised equipment for use by inspectors and security personnel, and two twinning light projects related to the Merchant Shipping and Ports Directorates respectively.
Censu Galea is Competitiveness and Communications Minister
The second part of this article will be published on 3 January