26 October - 1 November 2000

Bid document for Freeport privatisation being finalised

by Franco Aloisio

A committee specifically set up for the privatisation of Malta Freeport Corporation is presently finalising the bid documents with the assistance of advisors of international repute, Prime Minister Eddie Fenech Adami has said.
“The privatisation of the Malta Freeport is a milestone not only for the company but also for the country as a whole, as it will set the blueprint for the privatisation of other government holdings,” the Prime Minister said.
Dr Fenech Adami was speaking at a two-day entitled “Medtrade 2000 – Conference and Exhibition”, organised by the Maritime Intelligence Unit and sponsored by the Malta Freeport.
Referring to the development of the Freeport Terminal Two, which was inaugurated last year, he said now that the new terminal was up and running, Malta’s Freeport had become a leading port in the world container traffic.
He said another important development was a reorganisation which was implemented in 1999 to differentiate operational responsibilities from regulatory functions. Such a development will lead to the privatisation of the freeport.
Dr Fenech Adami said: “By capitalising on our geographic location and maritime tradition, my government recognised that Malta could create its own niche as a hub for transhipment and other maritime
services in the centre of the Mediterranean. The success of Malta Freeport, and indeed of our maritime sector as a whole, is the fruition of this vision.”
The director of Drewry Shipping Consultants, Neil Davidson revealed figures about the development and expansion of the Malta Freeport Corporation and those of other ports in the Mediterranean area.
He said in 10 years Malta Freeport’s market share of the Mediterranean transhipment business increased to 15 per cent from 5.7 per cent in 1990.
Mr Davidson said at present, the Mediterranean port which has the largest share of transhipment business is Gioia Tauro with 27.8 per cent, followed by Algeciras (23.6 per cent), Malta Freeport (15.1 per cent), Piraeus (5.7 per cent), Damietta (5.3 per cent). The remaining 22.4 per cent of the Mediterranean transhipment business is handled by other ports in the region.
Ten years ago, the situation was quite different, Mr Davidson said Gioia Tauro in Sicily was not a major player then, while Limassol in Cyprus enjoyed a market share of 15.8 per cent in 1990. The latter port is not competitive any more today. In 1990, Malta Freeport had a 5.7 per cent share of transhipment business, while Algeciras’s share was 30.6 per cent. The other competing posts were Piraeus with 6.3 per cent and Damietta with a 5.6 per cent share.
Malta Freeport Corporation chairman Marin Hili said the shipping and port activity in the Mediterranean region has gone up by 10 million TEUs by the 2005 over the 1999 figures. Mr Hili said that despite the fact that there are over 64 ports all around the Mediterranean, transhipment traffic is concentrated in a few ports.

He said that the Mediterranean has been responding positively to the process of globalisation. The region is experiencing a growth in trade spurred by the globalisation of container shipping. The Malta Freeport’s chairman said this has encouraged ports to invest in their current facilities or develop new ones.
“As a result, and without going into the specifics of Mediterranean ports, the region offers a highly developed infrastructure coupled with advanced technology, that is capable of handling current and future demands,” Mr Hili said.
He added that the economic development in the Mediterranean and the demand for containerisation in the coming decades is critically dependent on a set of conditions which tend towards political, social and economic cohesion which will lead, in turn, to economic growth in the region.
“An increase in trade among the countries themselves, especially those on the northern shores of Africa and along the Eastern Mediterranean will strengthen the respective countries. The regeneration of economic activity will, in turn, imply an efficient internal transport system supported by equally efficient containerisation system,” Mr Hili said.
Mr Hili said the globalisation of container liner shipping is represented by the forging of alliances, mergers and take-overs, private sector involvement in port operations, deregulation in shipping and the use of larger container vessels.
The Medtrade 2000 conference is chaired by Hans Peters, former Principal Transport Advisor of the World Bank and partner of the Maritime Intelligence Unit. It is an internationally renowned maritime event and Malta Freeport’s role as host underlies the importance the port plays as one of the world’s most significant transhipment hubs. The conference provided the Mediterranean maritime community with an opportunity to identify and debate the main structural changes that ports, terminals and related industry participants must respond to.
It focused also on transhipment and all associated operations and disciplines. Particular attention was given to the new regional and feeder role being carved out by many of the traditional gateway ports in the region. The event also charted the progress of the Mediterranean unit load industry, measured against best practice worldwide and the optimum paths to cargo generation and shipper satisfaction.
Among the speakers were Catalina Parra, Principal Mercer Management Consulting; Andy Stimpson from the European Commission Transport Directorate; and Jordi Cistero, Director of Strategic Planning of the Port Authority of Barcelona.