The discussion of the amount of increases in port fees that the management companies of the general cargo terminal intend to impose for 2023, in the port of Limassol, as well as a differentiation of the way they are calculated, is requested by the KEBE, as it considers the practice to date to be incorrect.
As stated in a letter to the Ministry of Transport, Communications and Works, the permanent position of the KEBE is that ports must provide high-quality and fast services at competitive prices and maintain a flexible and efficient operation, simultaneously advancing in all the necessary investments in infrastructure and modern means of operation.
The two private companies that manage the general cargo terminal, (P&O Maritime Cyprus Ltd and DP World Limassol) have expressed their intention to use the right given to them by the port management contract, in order to impose increases in their charges for in the year 2023, notes the KEBE, adding that the percentages of increases that have been initially published cannot be accepted.
More specifically, reports the KEBE, DP World Limassol announced that from January 2, 2023 it will proceed with increases of almost 30% and the company "P&O Maritime" announced its decision for a 12.5% increase in docking and departure fees.
He recalls that in DP World Limassol there was an intention to increase 16% in 2022, a percentage that was reduced to 9% after the state took over the repayment of loan for dock workers.
"If we add the amount of increases in the last two years, the percentage rises to an unreasonably high 46%, proving beyond any doubt that the way of calculating the increases included in the concession agreement is wrong and needs to be changed directly, in a way that reflects the realities of the Cypriot market”, he adds.
The KEBE also reminds that «detecting this weakness in time of the contract proceeded two years ago by submitting a legal opinion to the Ministry of Transport, Communications and Works clearly documenting that it is a wrong practice to include in the Index only producer prices, for the domestic market, excluding exports.
With the exception of labor costs and energy costs that negatively affect managers, the Chamber indicates that the rest of the increase in the Index is primarily due to imported inflation that affects the cost of production of domestic products and has nothing to do with the cost operation of the ports.
The position of the KEBE is that in the calculation of the above Index only costs that are directly related to the services provided by the ports should be included.
In the letter, a second "equally important weakness of the Index» and specifically the fact that the determination of the increase results from the comparison between the months of December of base year (2015) with December of the year under discussion, instead of taking into account the variation of the Index on an annual basis.
Ultimately, the KEBE considers that the Ministry should take the initiative and convene a joint meeting, in our presence with the management companies, to discuss the amount of the increases they intend to impose for 2023 and at the same time to start the process of modifying the way the increases are calculated, "with all that this entails".
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Source: KYPE
