News | Wednesday, 27 May 2009

Mangion’s claims on Gozo Ferries Ltd ‘incorrect’

With reference to your article “Finance Ministry hides Gozo ferry losses”, some clarifications are in order.
You define the figure of €10 million as ‘inexplicable operating revenue’. Indeed, this has a clear and simple explanation. Vessels purchased by Gozo Ferries were to be eventually repaid by Gozo Channel through regular fees with effect from 1st January 2005 when the charter agreement was put in place.
Government decided responsibly to assume these dues instead of seeking to recover such funds through the consumer by increasing Gozo Channel’s fares. This would have not been beneficial to the thousands of jobs on our sister island that depend on the local and foreign tourists crossing the channel using the ferry.
As a result, this figure appeared as income on Gozo Ferries’ books. There are two incorrect statements in the report when it is stated that ‘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 first statement is incorrect in that Gozo Ferries did pay the shipyards (at the time Malta Shipbuilding Co Ltd and Malta Drydocks) for all the works performed on the vessels, save where there were disputed amounts that were not deemed acceptable by Gozo Ferries Co Ltd.
The second statement is also incorrect in that the Government had paid for these vessels through various direct advances to the company, and by guaranteeing loans from local and foreign banks, which it then undertook to repay back through scheduled repayment programs.
In its actions, Government has defended the interest of the consumer and protected the livelihood of Gozitan families by taking upon itself these costs rather than simply seeking an immediate return by recouping the investment through higher fares.

Keith Zahra
Communications Coordinator - MFEI


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27 May 2009

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