PAPER PRESENTED BY THE HON CENSU GALEA, MINISTER FOR TRANSPORT AND COMMUNICATIONS AT THE CHARTERED INSTITUTE OF TRANSPORT, (MALTA) CONFERENCE "WHERE IS MARITIME MALTA HEADING?"

Mr. Chairman,

Ladies and Gentlemen,

Introduction

Discussing Maritime Malta is always relevant and opportune when one considers the millennia old maritime traditions of these islands. Given our insularity, sea transport was always considered as a vital link between us and the neighbouring countries. The Maltese have always sought ways of ensuring sustainable sea transport and turning the islands' perceived geographical constraint into an asset which has over the years determined the intrinsic potential of our economies.

It is hence no wonder that today Malta boasts of a Shipping Register which is the fourth largest worldwide; (even though the real increase happened over the last eleven years), two ports offering a comprehensive maritime package and a consensual concept to transform these islands into a regional maritime hub.

These achievements were only possible because Malta as a whole believes in the inherent capabilities of its resources, whether these are material or human. These targets were met because there was a commitment on the part of all: the various Administrations, the public entities involved and the industry players themselves. Perhaps maritime policies in so far as merchant shipping is concerned are amongst those items on the country's agenda on which a general consensus exists. Such agreement facilitates progress.

Times change, and the old maritime Malta had to undergo an ongoing evolutionary process in order to further maximise on its potential and also to honour its obligations to the global industry in general.

It is with satisfaction to put on record that merchant shipping legislation in Malta is today of such fabric and quality as to be more representative of the industry's realities and is conducive towards the facilitation of trade and commerce between Malta and the outside world. This notwithstanding; Malta Maritime Authority has identified subsidiary legislation which requires to be enacted in order to put our industry on an equal footing with our competitors.

Merchant Shipping

The amendments of 1990/91 to the Merchant Shipping Act are considered as having been the turning point for our Flag and have led to the yearly sustainable growths. The recent amendments to the Act further consolidate this position whilst placing more emphasis on safety standards and providing for the better regulation and monitoring of the industry.

Sitting on one's laurels is synonymous with entering in a "stasis" where time stands still. Soon one would recognise that he is suddenly lagging behind as the past achievements would have been overtaken by events. This should encourage us to venture forward by way of embarking on initiatives that would consolidate us as market leaders and attract new businesses whilst monitoring and enforcing the fleet's compliance with international legislation such as the IMO and ILO Conventions.

The Shipping registry is experiencing a very challenging period. The different market changes have led us to carry out a soul searching exercise in order to determine objectively, impassionately and rationally what requires to be possibly changed in order to ensure the improved safety of our 28.6 million ton fleet.

As the Director responsible for Merchant Shipping would explain, the Directorate has embarked on a long term strategic plan which would enable the Directorate to enhance its administrative capacity. This is being done through the engagement of more Port and Flag State Inspectors. Besides that we are committed to introduce training courses for our present Inspectors. The Directorate is also committed to ensure that the good qualities of the Malta Flag are made known to one and all. To ensure this, we are making the necessary efforts to guarantee that good quality ships are registered under our flag. Over the last months nearly 50 ships were refused registry, while another 40 ships were removed from the Maltese ship register.

We are committed to ensure that all IMO and ILO requirements are adhered to by ships registering under the Maltese Flag.

These measures are primarily aimed at enhancing the safety of ships, the seas and the ports. It is extremely important that everyone believes that these are top priority factors when registering ships.

Ports

The ports play a primary role in the economy of the islands. Through years our ports have embarked on projects which not simply cater for the islands' imports and exports requirements, but have succeeded to attract transhipment businesses together with complementary value-added activities which not only generate the influx of foreign revenues but also provide job opportunities for hundreds of Maltese.

With a Malta Freeport reporting throughputs of over 1 million Teus per year, with a cruise liner industry that has experienced yearly growths over these past six years – this year circa 300 ships are expected to visit Valletta as against last year's 220, with a bunker industry which following its liberalisation in 1996 has reached an annual throughput nearing the 1 million tons and with a fledging ship-repair industry, Maltese ports are experiencing busy times.

What requires to be discussed in an open forum is whether in view of the cut-throat competition amongst Mediterranean ports the present level of competitiveness would continue to be sustainable in the years to come. This discussion has to take place in such a way that workers, operators, trade unions and the public in general could benefit. Impulsive action could lead to the death of the chicken that would presently lay the golden egg. It is extremely important that whoever is involved in port activities, realises that the time for dictat does not exist any longer.

The Mediterranean ports are currently experiencing a renaissance. Shipping calling in the Mediterranean. ports as well as that passing through this basin is expected to increase by circa 20 per cent in years to come. Opportunities exist for the use of Mediterranean ports as transhipment hubs to countries in the North of Europe, West Africa and North America. Such projections are made in view of developments relating to globalisation, the increase in trade between Europe and the far-east and the emerging economies of Eastern Europe.

During 1999 the Malta Maritime Authority has commissioned "The Port of Valletta Strategic Development Plan". to an international reputable ports consultancy firm. This study has identified the strengths and weaknesses of our ports and the commercial potential for the port of Valletta. Moreover the study has recommended changes to the existing legislation and a general review of existing port practices.

The Consultants conclude that while Valletta ranks high amongst neighbouring comparative ports in respect of its geographical position, the present institutional regime is not conducive enough towards attracting new business opportunities. The main reasons put forward include a highly complex port management organisation, an inflexible and complex tariff, and a complicated legislative regime as against service contracts.

On the other hand the same study suggests that there indeed exist a tangible market potential for the port of Valletta. It identifies cruise and ferry industry as well as RoRo transhipment operations, together with other ancillary port services, as possible market niches. These suggestions are in addition to the operations being carried out today.

In the coming months it is the intention of my Ministry and the Malta Maritime Authority to convene a meeting involving all members of the ports community in order to discuss in depth the findings of the said study and to identify a way forward.

In this respect it is the opinion of the present Administration:

1. to declare as "ports" those areas in Valletta which require to form part of the commercial port,
2. to transform the Authority into a landlord autonomous authority and
3. to embark on a gradual review of existing ports institutional set-up.

The ports form part of Chapter 9 of the EU Acquis which is currently being negotiated with the EU Commission. The ports industry according to the EU acquis is subject to competition, safety and environmental rules. The EU Commission has just published for discussion a proposal in respect of the provision of port services in ports. Another proposal consists of a Directive for the adoption of the IMO FAL Convention in order to facilitate shipping using

EU ports and to promote Short Sea Shipping. Last December the Commission published a Directive on Port Reception Facilities which again takes account of the various annexes of Marpol. These directives and proposals indicate that EU rules are based on international regulations and conventions.

In view of the above it is suggested that the present administration should embark on the following initiatives:

1. a general review of present ports legislation; this could include a rethinking of the present ports authorities' remits;
2. a review of present legislative provisions concerning the establishment of service providers;
3. the development of a contractual regime, between the port authority and the service providers;
4. the development of a national ports policy.

The necessary institutional changes shall be embarked upon after consultation with the entities involved. I firmly believe, that such re-organisation of our ports shall be fruitful to all those involved. It should bring about an increase in activity and an increased income to the various operators involved. Besides that, it should also ensure that working in our ports becomes a much safer activity.

Besides these port activities, strictly local activities such as yachting, inter island transport and small craft activities, which in themselves are very important locally, have to be developed even further.

Conclusion

Ladies and Gentlemen, we all understand that being critical of our inputs in the shipping and ports industries does not necessarily mean that we do not appreciate the thorough efforts being done by all and sundry by way of maximising on the present potentials. On the other hand we all recognise that we are today experiencing a continuously evolutionary scenario to which we must react positively in order to sustain our leading positions.

Quality standards on board ships have become more stringent in view of a greater awareness towards safety and environmental protection. Various IMO Committees are regularly discussing and introducing measures in order to ensure safer maritime related regimes. On its part the EU is committed towards barring sub-standard shipping from its ports and waters. These measures are extremely important to ensure safer maritime activity and to ensure a safer marine environment. Hence it is also our duty to ensure that apart from our regulatory responsibilities we consistently assist shipping in reaching its goals.

As regards ports we have now reached a stage where we are tapping business activities which may not necessarily take place in our ports. Almost all Mediterranean ports are actively involved in massive port developments by way of attracting transhipment and establishing themselves as hub ports. This translates into fiercer competition where only the strongest survive. Hence it is also our duty to ensure that at all times we retain our competitiveness and ensure the constant upgrading of our services.

I congratulate the CIT (Malta) for organising this conference which is certainly an ideal forum wherein maritime issues may be openly discussed. It could not have been held in a more appropriate time. I do hope that today's event serves as a brain-storming exercise whilst identifying a way forward for our maritime industry.