ECONOMY

Passenger shippers demand less meddling by the state

The present problems in the passenger shipping sector will be aggravated a few years hence, specifically in 2008, when half the ships now plying the Aegean and Ionian routes will have to be withdrawn as they will have exceeded the mandatory 30-year age limit. At present, shippers are unable to replace their aging ships because the business climate does not favor investment. They also complain about the constraints imposed by the current law regulating the sector. Law 2932/2001 on the «deregulation of domestic sea transport» far from making Greek legislation compatible with European regulations – specifically Regulation 3577/1992 – maintained old obstacles, such as the retirement age for ships, which it lowered to 30 years from 35, and retained the merchant marine minister’s right to intervene on a wide range of issues: to impose extra services on the main routes, to impose restrictions on economy seat prices, set charges in favor of third parties that burden passengers as much as 30 percent on top of the price of a ticket and set special prices for certain social groups in the name of welfare policy. If the law is not modified, 36 passenger ships, or 50 percent of the existing fleet, will have to be withdrawn by 2008 and another three by 2013. «If we wanted to avoid plunging the sector into crisis by the withdrawal of all those ships, we should be building at least 30 new ones, something that, unfortunately, is not taking place,» a member of the Coastal Shipowners’ Union says. «How can we build new ships when there is no new investment in passenger shipping and it is impossible to draw capital from the stock markets because the shipping stocks are doing badly?» he wonders. Passenger shipowners say that the only way for the sector to thrive is a «hands-off» approach on the part of the state. «The ministry should stop meddling in coastal shipping and let enterprises operate within the framework of (the EU regulations). The Merchant Marine Ministry should let competition work in deeds and not only in words,» says Pericles Panagopoulos, head of Attica Enterprises. Asked about subsidizing prices, Panagopoulos says: «EU Regulation 3577/1992 says the state can subsidize routes where there is scant business interest, as happens today. If the state wants to implement welfare policies, it should subsidize fares for some passengers,» he adds. Nowhere else in Europe does a limit on a ship’s age exist. Ships must abide by operation and safety rules spelled out by the Stockholm Treaty. Greek passenger ships transported some 15 million passengers, 1.6 million passenger vehicles and over 400,000 trucks in 2004. In July this year, over a million passengers used the port of Piraeus. Of the 2,600 scheduled routes, 12 were canceled due mechanical failures on eight ships.