Anyone visiting or living in Gozo cannot do without the ferry services. These are the “life line services” which provide Gozo its means of existing and above all living.
Private companies ran this service offered by Gozo Channel until the 1970s. The then Labour government took it over in 1979 and set up the Gozo Channel Line. There are only a few exceptions to this monopoly.
Following Malta’s accession to the EU, Gozo Channel has been running the service justified by a so called public service obligation contract–PSO. This contract enables the government ways and means to funnel taxpayers’ money as state aid, which is allowed by the EU for essential services. This level of state aid has ballooned from around €1 million up to 2017 annually to about €17 million forecast for the end of this year.
This PSO contract expired in October 2017 and the present government has been extending it annually rather than issuing a call for bids from private sector companies interested in offering the essential service.
No wonder the Minister for Gozo stated and insisted in parliament on Nov 2022 “Gozo ferry was and will remain government run”. Obviously, the minister had other interests in saying so in parliament.
Until 2017, the government passed subsidies to Gozo Channel for less than €800,000 a year. These funds reached €10 million in 2022 and including also a €6 million a year to subsidise the fast ferry service provided by two operators. It was crystal clear that one operator would have been financially viable to run this fast ferry service. This was possible following a revision of the rules through an addendum to the ‘Public Service Obligation Contract’ (PSO), seen by ‘The Shift News’, in which the Transport Ministry and Gozo Channel agreed to a drastic revision of the ‘compensation mechanism’ to keep the State company afloat.
According to EU rules, Gozo Channel may be eligible for state aid after the company issues a public tender every six years. So this year (2023) we expect the taxpayer to fork out a subsidy touching €16.8 million. The same subsidies cover every cargo trip, above a minimum of three trips per week.
But the Gozo Minister’s interest in controlling the Gozo Channel goes further. The company is continuing to employ more human resources than it requires. Although not directly on the government’s payroll, ‘The Shift’ news has reliable information that these additional employees usually need the backing by the Gozo Ministry for eventual contract work with the Gozo Channel. In 2021, Gozo Channel employed 181 full time and 150 additional workers through various contractors. The company paid these contractors almost €5 million for these employees – equivalent to an average of €38,000 per hired employee.
The ticketing system is another mystery. Five years ago, Gozo Channel issued a tender for a new ticketing system which will cut down ‘ghost’ vehicles. Over 100,000 vehicles crossed to Gozo in the 8 years leading up to 2018 without returning to Malta. Five years later, who knows how much that discrepancy has snowballed?
The tender, which closed on December 11, 2018, included an automatic vehicle counting system covering three quays at the Ċirkewwa Terminal and two quays at the Mġarr Terminal. The system was to function within 14 months of the award of the contract. We are still in the first phase of the ticketing system.
This state aid is not bottomless and timeless. The Government needs to address this critical situation at the earliest for the benefit of commuters, company employees, and Gozo. What future planning is there? The GRDA–Gozo Regional Development Authority launched the ten-year strategy–This document refers to ‘Accessibility’ as a comment, not as an implementation. Gozo Channel does not feature anywhere. Does this mean that in 2033, Gozo will remain in the present severe scenario?
Two years ago, the PN opposition proposed that a new Nationalist government would invest in two new ferry ships for Gozo, expand the Mġarr harbour and hold a referendum on the proposed tunnel between the two islands.
Gozitans were eager to know the government’s budget proposals for 2024 affecting the Gozo ferry services, at least the Gozo Channel’s medium-term financial plan. Unfortunately, the finance minister allocated no extra funds to Gozo Channel. Still, the Prime Minister launched the 10-year strategy plan drawn by the GRDA. According to Dr Alfred Sant, “a strategy cannot comprise a list of objectives. It should also propose concretely what decisional, economic, social, legislative, and financial mechanisms the GRDA needs to implement them”.
The efficiency of the current fleet of ferries should be a major concern for the company. Government insiders describe the three Gozo Channel vessels, which were commissioned in 1996 as “outdated fuel-guzzlers”. Gozo Channel complicated this issue further when in 2019 it wet leased a 32-year-old Greek owned ferry, the MV Nikolaus, at €13,000 daily.
Four ferries can hardly meet the daily operations demand, especially when any of these ferries need maintenance and repairs. In Feb 2023, Ta Pinu ferry needed repairs and the ferry service saw delays of up to two hours. Angered commuters took to Facebook to share their hindered journeys.
The future does not look bright and promising for Gozo Channel. The Mgarr Harbour has only two berthing places. It is really problematic to operate with more ferries, whether these are state owned or private.
Last but not least, a special mention to the crews operating the ferries. They are continuously exposing themselves to toxic vehicle emissions to the detriment of their health. Is adequate protection according to the latest Health and Safety standards and insurance available? Even more so for the contract workers. They need support also, but at present they are merely lining their contractors’ pockets with unjustified subsidies.
Unless the government tackles this complex situation at Gozo Channel with immediate serious planning, matters are going to spiral beyond reasonable control. Is this another Air Malta saga? Hope not, Gozitans deserve better!