By Stelios Louca Stylianou*
There is no doubt that the privatisation process at Limassol port was clumsy. It lacked vision and substantial economic parameters, but above all, it failed to exploit the opportunities and unique advantages that Cyprus has to offer in this area.
The situation is reversible but requires the correct approach. It was a unique opportunity for Cyprus to overcome financial difficulties, take advantage of enormous investment opportunities, and solve its unemployment problem, low growth rate and much more.
Unfortunately, this is still a major issue that must be addressed by the Republic. We need Central Strategic Planning (Master Plan) for the development and utilisation of all our ports, including those of Famagusta and Xeros.
The most incorrect privatisation parameter, however, is the concession of marine services at Limassol port, a service that typically falls under the ministry of merchant shipping or the port authority of a state. In the case of Cyprus, it should be under the department of merchant shipping or the Cyprus ports authority.
It is a service that cannot bring additional traffic or volumes to the port but the service safety factor increases the satisfaction of maritime companies. If the safety factor is low, it reduces satisfaction and prevents the movement of large ships. It is worth noting that serious accidents in the recent past in the Mediterranean Sea were due to the absence of a pilot navigation service that resulted in the loss of lives and caused pollution of enormous destruction.
The normal practice applied in many countries is that conditional contracts would be granted to foreign companies with recognised expertise which would provide training to the locals so that they could gradually take over the manning and operation of the service.
The local presence is considered vital because a pilot navigator is the first person to go on board a vessel entering the port. The pilot will check and report cases concerning security issues and compliance with rules and protocols. The pilot on board a vessel is acting as advisor to the captain but in actual terms has the control. The pilot is a very experienced master mariner with several years of experience on board vessels and specific experience in his area of operation. He has to continuously study and learn new systems and navigation techniques so he can make decisions to prevent damage, accidents and the interruption of access to and from the ports.
At the same time the pilot must be an expert in the specific area of operation, expert on manoeuvrings of any kind and type of vessel, as well as provide safe mooring at the port and save passage out of it.
Having said the above, it is also the usual practice, for countries to offer this vital service through dedicated operation agreement with companies that fulfill requirements and criteria for providing pilotage services, etc. This occurs in all countries with very few exceptions where the service remains entirely in the state.
All these however, do not have much significance today, since the service in Limassol port has been awarded to P & O Maritime (note: a unit of Dubai Ports).
Knowing all the above makes it possible to realise what ignited the pilots’ strike recently and the minister’s statements and his intention to revise existing regulation for the employment of Cypriot pilots.
Fortunately, in his instance, the intervention of (note: Citizens’ Alliance deputy) Anna Theologou was effective and the strike was terminated. Cyprus’ economy and business community cannot rely on such interventions. A stable environment from a permanent solution is what required.
It might be very useful for future reference to study the sequence of events from 2014 and the various proposals involved, which in my opinion could solve the problem, even without compensation and such incentives, but have been rejected.
What really matters is to have this service operate seamlessly, effectively and efficiently serving navigation now and in the future. To make this possible, pilots should simultaneously provide services to existing traffic and operate a training programme for new pilots and crew for both, pilot and tugboat services.
The duty, responsibility and liability lies with everyone involved.
P & O Maritime is committed by contract to provide these services from January 2017 for 25 years. According to the tender specification it was required to have knowledge of existing conditions and legal framework, operational arrangements, rules and protocols.
One such regulation stipulates clearly that only Cypriot shall be employed for navigation in all ports of Cyprus, for reasons the company itself knows best since it is a company operating globally for several decades under similar conditions.
Revision of this system is not possible for many reasons, one of which is the unfair advantage after the award of the concession agreement to the detriment of companies that lost the bidding process.
Therefore, P & O Maritime will implement the rule of existing laws and regulations, defining the methodology according to which it will operate with Cypriot pilots. The form of cooperation should not be the concern of any other than the two parties.
Every day of delay in finalising an agreement is delaying recruitment and training new pilots and tugboat personnel.
Pilots have an obligation, duty and responsibility to engage in dialogue with the operator of this service, solely driven by willingness to finalise an agreement as soon as possible.
In no case, however, should there be disruption to the navigation of vessels.
Pilots must commit irrevocably and effectively and certainly engage in negotiations.
Having in mind the recent involvement of the minister, repetition would be counterproductive and could trigger new conflicts. Last week’s strike was due to the minister’s statement over the threat of changing the regulation concerning the pilots’ nationality.
The role of the ministry was to finalise and conclude the concession agreement. This is now over and so the role of the ministry has come to an end. After signing the contract, the minister must designate a representative to act as administrator and supervisor of the agreement. In addition, the relevant parliamentary committee as well as other government and autonomous agencies are to have the responsibility and control on the basis of existing legislation.
It is worth noting that the Cyprus government doesn’t have any benefit from the reduction or fluctuation in any way of cost implications. This is the responsibility of the operating company. Leaving aside that state intervention cannot be acceptable by any standards as yet could be taken as a sign of fixation for personal benefit.
Pilots on the other hand know very well that cannot benefit, if they try to exploit the situation.
The equation is simple. P & O Maritime needs Cypriot pilots to operate maritime services, Cypriot marine pilots are required to offer the services.
The solution is simple, P & O Maritime + Marine Pilot/Navigators = Cooperation. Last but not least, the stakes are very high, beyond the interest of anyone or any organisation. Therefore, solution now is vital.
(*) Stelios Louca Stylianou is a Ports Management Consultant ([email protected])