Tug Malta Ltd has written to all shipping agents to inform them that towage tariff will be increased by 10.35% as from 1 July 2012. This comes on top of an increase of 5.5% on 1 July 2010 and another increase of 5.5% on 1 July 2011.
So in three years there has been a compound increase of 22.8% in tariffs. Whereas the increase was spread over 2 years in 2010/11, the full increase was applied this July. Port officials are saying that now there will not be another increase next year, but only in 2014. Quite clearly the PN government has allowed such hefty increases before the upcoming elections so that they are rewarding their associates before the next elections.
Malta and the world experienced a recession in the last four years and indeed Malta was in recession in the last two quarters but the PN government has sanctioned a 22.8% compound increase since Tug Malta was privatised to the Italians.
The higher towage rates make Maltese ports (including Freeport) less competitive in today's market where there is intense competition for transhipment business. It also increases the cost of freight that will reflect in the cost to consumers.
The new, modern cruise liners are normally spared the use of tugs because they have what are called bow-thrusters that substitute the use of tugs but the less sophisticated cruise liners will still be hit by this increase.