Ferry operators want investment incentives

Vessel withdrawals could result in service cuts

NIKOS BARDOUNIAS

Ferry operators are warning that nearly half of the existing conventional coastal shipping vessels will have to withdraw by 2008, if a law lowering the ship’s maximum age limit from 35 to 30 goes into effect.

This and the lack of implementation of the EU regulation for full liberalization have created conditions discouraging investments, increasing the risk of leaving many islands without service.

Coastal shipowners say the state must create a political and financial climate for attracting investments — in essence, the entry of newly built vessels in coastal shipping and, therefore, the improvement in safety and service offered to passengers.

“The conditions required are the change in the framework and the imposition of full liberalization of domestic sea transport so that each company, free from the existing state interventionism, can plan its short- and long-term strategy,” sources from the Coastal Shipowners’ Union (EEA) told Kathimerini.

The same sources stressed that by 2008, with the age of ships’ withdrawal at 30 years, 36 conventional vessels will be withdrawn, i.e. 50.7 percent of the existing fleet.

“If we did not want to upset the coastal shipping transport by taking 36 ships put of service, we should have already started building at least 30 new ones, which is unfortunately not happening,” sources said, asking “how can we build ships when there is no investment in the industry and drawing funds from the stock market is impossible due to its bad course?”

Ferry operators warn that, within the next few years, they will be unable to fulfill their service obligations due to lack of vessels. They also again ask the state to abolish third-party levies, which reach 30 percent of their total fare value. Without these duties for porters, boatmen and harbor workers, fares would drop automatically, ferry operators say.

Companies have sent a memorandum to the Finance Ministry calling for value-added tax (VAT) on vehicle fares to fall to 9 percent from 19 percent today. EEA argue that the same percentage of VAT applies to the transport of people and their luggage.

However, the memorandum adds, lorries traveling on ferries on domestic routes usually carry goods with 9 percent VAT, while the vehicle fare has 19 percent VAT.