French multi-national shipping company CMACGM, which operates the Freeport, is set to invest €130 million and increase its complement by 500 employees in a bid to handle more traffic, said IT and Investment Minister Austin Gatt yesterday.
Dr Gatt said that the company had seen so much successful business in Malta that it wanted to invest more in floor space so as to increase the number of containers it handles at the Freeport in Birzebbuga to three million within three years, compared to the 1.9 million being processed at present.
He said that the Freeport was privatised in October 2004 and CMACGM was given a 30 year lease. “The government knew that the Freeport needed investment and we believe in the private sector, so we went ahead with it,” he said.
Since then, the line has grown, going from seventh largest carrier in the world to the third since 2004. “The Freeport is now the fifth largest handler in the Mediterranean, and this investment will see it grow even further,” he said.
Dr Gatt said that the privatisation of the company ensured its own growth. “The company was obliged to invest e12 million over three years, but so far, we have already seen an investment of e45 million,” said Dr Gatt.
He said that the increased traffic to Malta led the company to employ an additional 232 workers, with another 20 being engaged only last week.
Dr Gatt said the growth figures were substantial. “In 2002, CMACGM was handling 1.2 million units. They now handle 1.9 million units and are expecting three million in five years’ time,” he said.
He said that the Freeport was full, presenting problems of a welcome kind. “They need to expand, they believe in their operation here in Malta and this all has to be seen in the context of the Maltese economy’s growth over the past few years,” he said.
Dr Gatt said that the injection of cash will be used to finance land reclamation to extend the area of both existing quays, to allow for more gantry cranes, used to unload container ships.
“We are also going have to dredge the bottom of the harbour to allow access for 10k+ vessels, the so called next generation container ships, to berth at the Freeport. The government will be laying down a maximum of e15 million while CMACGM will foot the rest of the bill, which is estimated to be a total of €30 million,” said Dr Gatt. At present the depth of the harbour is 15.5 metres, which is to be increased to 17 metres, he said.
In addition, CMACGM will be expanding the present yard space by 133,000 square metres. Moreover, said Dr Gatt, the government of Malta has offered to extend the 30-year lease by another five years, with the option of CMACGM retaining use of the Freeport for an additional 30 years. This is all providing that the company keeps to its investment obligations. The total rent value for the total period in question is $372 million, excluding investment and jobs.
He said that if the 500 jobs are not provided, then CMACGM will have to pay a forfeit fine. Quizzed by this newspaper on the opposition’s view about privatising Maltese state assets, Dr Gatt was steadfast in his stance. “Every time the government has made a move to improve matters in this country, the opposition has declared its stance against it. We could see this with SmartCity and we have seen it all the more with the Freeport.”
He continued: “The facts speak for themselves. All the assets we have shed perform better under private sector administration. We want the private sector to take over all government assets as they can get better results. The MLP, on the other hand, simply wants to keep everything in its own hands and then attempt to subsidise their running,” said Dr Gatt.
Prompted by this newspaper on the effects of the euro as a potential foreign investment magnet, Dr Gatt said: “Changing over to the euro has allowed our central bank to free up a lot of cash reserves previously backing the lira. This, along with the fact that there is more security offered by the euro, shows that this government is serious and credible, leading Malta to be viewed, in turn, as somewhere serious and credible for investors.”
He continued: “In fact, the latest offer by the government to sell its shares in Maltapost, has led to the mass lot being over subscribed to by over 14,000 in just a few days. That is a clear answer to the MLP. These are local people wanting to invest their money in Maltese owned private sector businesses sold off by the government.”