The news that Malta Freeport Terminals Ltd will be investing a total of e40 million – about Lm17 million – in a year to improve its efficiency and services is a clear example of the positive aspects of privatisation.

The Freeport had made Lm3 million in losses in the previous two years, and its future looked uncertain.

Now, following the handing over of a 30-year operation and development contract to French shipping company CMA-CGM last October, matters already look brighter. This week’s announcement of the company’s intention to invest Lm17 million in one year since

taking over is what the Freeport needed to boost its

operations.

When the privatisation agreement was reached last October, Investments, Industry and IT Minister Austin Gatt said that Malta stands to gain $421 million (about Lm150 million at the current rate) over the 30 years of the contract. After these 30 years, the Freeport will be back in the government’s hands. So the country already stood to gain from such an agreement.

The French company, the fifth largest shipping firm in the world, pledged to upgrade the equipment and technology in use at the Freeport and increase the storage space and the number of gantry cranes. True to its word, CMA-CGM has now made public its plans of how this is being done.

This type of investment was needed to keep up with the times but, if the Freeport had remained in the government’s hands, it is highly probable that such an investment would have not been made, considering the country’s financial situation. The Freeport would have gradually not been able to maintain its momentum and its financial problems would have grown.

As it is, the Freeport’s operators will be the ones who will be spending the money to upgrade the facilities, and by doing so its future prospects are better than they were just one year ago.

In its statement last Tuesday, announcing what type of investment the company is undertaking to modernise the Freeport and at the same time improve operations, it was said that the investment was part of a project targeted at expanding the facilities and increasing the equipment fleet. “The investment programme will ensure that the Freeport is geared up to continue operating the largest container vessels afloat, thus securing a larger share of the Mediterranean trans-shipment market.”

Considering that shipping lines are investing heavily in larger container vessels, which require deeper water and adequate quays, and which have to be handled by bigger gantry cranes, such an investment is necessary if the Freeport is to remain a busy port. Otherwise, restrictions would limit its operations and therefore reduce its business, as the bigger vessels will go elsewhere.

Last October, Malta was the first Mediterranean port to operate an 8,500 TEU (20-foot equivalent unit) China Shipping vessel. In November, the Freeport will be able to handle an even bigger vessel – 9,000 TEU capacity, while it prepares for larger ships (10,000 and 12,000 TEUs) currently being built in various shipyards.

All this will be possible through four new cranes that will be able to reach 22 containers across the vessels. Apart from this, the Freeport is also investing in 10 new rubber-tyred gantries and will be expanding its container capacity area by 70,000 square metres.

One other important aspect that has come about as a result of the privatisation of the Freeport is the investment in human resources, mostly through training programmes and enhanced communication methods. Over the past eight months, productivity levels have increased by 40 per cent – a clear indication that, when motivated, Maltese workers can perform better.

The privatisation of the Freeport has meant that a company in difficulty will now be investing heavily to upgrade its services and operations.