Government dismissed the Gozo Business Chamber’s protests against new ferry ticket hikes as “unfair”, saying that Gozo Channel was still operating at a loss.
The business chamber had criticised the government for increasing Gozo Channel fares at a time when the Investments Ministry was stating the company was not operating at a loss.
“This confirms that there is no scope for further increases,” the chamber said, protesting against the upcoming ticket increases next month which it said “will definitely discourage Maltese and tourists alike from crossing over to Gozo”.
But the government insisted that Gozo Channel was still operating at a loss, with last year’s accounts recording a loss of Lm27,000.
“Though that is far less of a poor showing than previous years, the reality is that the company has accumulated losses of Lm988,554 at the end of 2003,” the ministry said, adding that since November 2003 the company saved more than Lm200,000 through a “severe cost-cutting regime”.
The ticket hike includes a 25c increase---- for all passengers with cars. Such increases affect not only Gozitans who have to cross over to Malta daily to go to work but also tourists who visit Gozo, the chamber said.
But government said that the company must operate at a profit, not merely operating without losses, to be able to fund its investments.
“There is certainly no intention of turning Gozo Channel into a cash cow for its shareholder, but beyond the obligation of a public service nor should Gozo Channel be an unsustainable drain on public finances,” the investments ministry said. “In the restructuring of Gozo Channel, we set a profit target of 5 per cent over the total cost-base of the company, a much lower margin than is usually charged by business.”
Since April 2004, Government agreed to pay Lm1.5 million per annum to subsidize the travel of Gozitan residents, holders of Karta Anzjan and those who use the Night Service.
In February this year, the Government decided to impose on Gozo Channel the obligation to continue the Sa Maison service, even if this is not, when seen on its own merits, commercially feasible.
“The continuation of this service, which directly benefits the commercial community, will mean an added Lm115,000 paid by Government annually through an extension of the Public Service Obligation,” the government said.