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News | Wednesday, 20 May 2009

Finance Ministry hides Gozo ferry losses

David Darmanin

After the Ministry of Finance refused to pass on to Business Today the latest audited accounts of state-owned companies and declined to comment on questions passed on to it with regard to Gozo Channel, it now transpires that the company operating the ferry service between Malta and Gozo has not declared ownership of any of the vessels it uses for the service.
Although in 2003, Gozo Channel received from the Malta Shipyards three newly built vessels worth in the region of €70 million, no such assets appear in the channel’s most recent audits submitted to the MFSA. Had such assets been registered, any loan repayments and depreciation costs related to them would have turned financial results from an operational profit of €76,657 to severe loss.
Gozo Channel sources informed this newspaper that another government subsidiary by the name of Gozo Ferries Ltd appears to be the owner of the vessels.
2006 audits for this company show that losses of €225,223 and €50,507 were incurred in 2005 and 2006 respectively. In 2004, the company made a profit of over €8.5 million – but only after the inexplicable operating revenue of over €10 million was registered in its accounts, compared to that of just over €400,000 in consequent years – after Malta’s accession into the EU.
Audits show that Gozo Channel never paid Gozo Ferries Ltd anywhere close to €10 million in 2004.
Gozo Ferries’ fixed tangible assets remained the same for 2004 and the years that followed. This indicates that the 2004 operational profit could not have been boosted due to any sale of ships owned by the company.
Notwithstanding the impressive operating revenue registered in 2004, Gozo Ferries Ltd closed its year with accumulated profits of just over €3.5 million.
Moreover, Labour MP and Public Accounts Committee Chairman Charles Mangion confirmed with this newspaper that Gozo Ferries Ltd “never paid the Malta Shipyards for the last three ships it purchased.”
Mangion said that the ships were repaid by government only when it absorbed all debts pertaining to the shipyards.
The last available audits for both Gozo Channel and Gozo Ferries Ltd date back to 2006, even though 2007 accounts were due for MFSA submission by latest last September. But the 2007 shareholding value of the same company was still published by the Finance Ministry in the 2008 financial estimates, indicating that the company accounting is up-to-date albeit not submitted to the state regulators.
Mangion called on government to pass on to parliament all accounts related to public entities, even if government owns only a minority stake.
“As chairman of the public accounts committee, I can refer to the Auditor General to make his judgment on moneys spent,” he said. “But we need all accounts to be tabled, whatever the quota owned by government.”
At the start of the current legislature, both Gozo Ferries Ltd and Gozo Channel were included within the portfolio of the Finance Minister, whereas the audits reported were within the responsibility of Infrastructure Minister Austin Gatt.

ddarmanin@mediatoday.com.mt

 

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20 May 2009
ISSUE NO. 583

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