The issue of the increase in transit fees for goods and the impact on trade and business activities was discussed today at the Parliamentary Committee on Energy, Trade, Industry and Tourism.
The increases may be contributing to rising inflationary trends and therefore must be addressed, the Committee demanded.
The Chairman of the Committee, DISY MP Kyriakos Hatzigiannis, said that these charges are very worrying, especially at the current juncture, as they have an impact on inflation. "We do not play with inflation," he said, and called for restraint. In a statement after the meeting, he said that a two-week deadline was given for this effort to come to something, mediated by the Ministry of Transport. The commission's request is for the companies to freeze the increases, he said, as there is a risk to the entire economy.
Director General of the Ministry of Transport, Communications and Works Stavros Michael said the contract includes an index, which is in all contracts, for price adjustments. "What we are concerned about is that the increases will cause inflation that will be passed on to consumers." He said the ministry reacted from the very first moment, calling on January 14 to all stakeholders, appealing to the companies to avoid any charge. In case the companies do not review the increased charges, the ministry is studying ways to mitigate the problem. In 15 days they will be able to report concrete actions by the government on this problem, he said."
A spokesman for the Commerce Ministry said it is important to maintain the competitiveness of the economy and export trade. Port increases do not contribute towards this goal, he noted and urged companies to show the necessary restraint.
Secretary General of the KEBE Marios Tsiakkis said that port management companies are members of the Chamber and he understands that they do have an increase in their operating costs. On the other hand, all businesses are being hit with increases that are necessarily passed on to consumers. Therefore, an increase of 16 % should be reviewed, as part of it relates to imported inflation which is included in the calculation index for the increase in fees. He also noted that the state should also forego its share of the increased revenues due to it.
For their part, the Limassol port management companies said that they comply with all the provisions of the concession agreement. They noted that the increases are justified on the basis of the agreements and that they result from the formula in the contracts. They noted that in previous years they absorbed the increase in operating costs.
P&O Maritime Logistics, it was said, made smaller increases than those foreseen (6-7% instead of 16%). DP World Limassol Ltd said that its Board of Directors will decide on the matter.
A representative of the Maritime Agents Association said that they attended a meeting called by the Ministry of Transport, at which it was confirmed that the 16.6% increase is correct based on the formula. He noted, however, that the formula is incomplete. For its part, the Association is asking the companies to recalculate the increase to be lower, and noted that the shipowning companies are holding back the increases to and from European and Southeastern Mediterranean ports.
DISY MP Fotini Tsiridou agreed that the problem does arise from the contracts. However, the issue of the concession of the port's operations was one of the first, larger, reforms made, and it is logical that it will have issues that need to be managed, she said. He noted that under the concession contracts for the Limassol port, 63 per cent of the revenue of one managing company dealing with containers and 52 per cent of the revenue of the other company goes to the state, resulting in €201.6 million flowing into state coffers to date.
He also said that there have been improvements in public service, with truck handling time reduced to 18 minutes. He noted that the government is expected to study the charges and come up with ways to relieve the trade of this painful increase.
AKEL MP Kostas Kostas spoke of a scandalous sell-off of public wealth. There have already been steep increases in fees since the day the contracts came into force, he said. He recalled that Parliament sent a letter to the Attorney General in May 2018 to investigate whether there were criminal or other liabilities for acts or omissions arising from the Auditor General's report on the matter. He said the government was grossly responsible with the consumer paying the price.
Chrisis Pantelidis[/B], a DIKO MP, said the issue was political. "We find that there are market sectors that behave as if they live on another planet," he said, adding that they are hiding behind legal provisions that were made without imagining the facts of the pandemic.
EPP MP Elias Mirianthous said that when a state monopoly becomes a private monopoly with the notion that development will be boosted in this sector, at the same time there must be a provision for supervisory authorities to carry out their work. "The Competition Commission had to intervene ex officio" to examine whether the increases were justified, he said. He added that if the state in this way gets revenue on top of revenue, it should give it as compensation if it cannot limit the increases."
Source: CNA
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