Malta Special Report: Island bids to boost its achievements

Malta’s identity as a strategic maritime hub is well recognised. However, as Felicity Landon reports, there’s a confidence that so much more can be achieved

The maritime industry is very dynamic and resting on one’s laurels is the worst thing one could do, according to John Gauci-Maistre, Chief Executive of GM Conferences & Exhibitions.

As the organiser of the Malta Maritime Summit, taking place this year from 1st to 5th October, he is a fierce champion of Malta’s strengths and advantages, and keen to promote the island to a global audience.

“Malta has always been a maritime nation, as its location has made it historically the most sought-after island in the Mediterranean, by traders and world powers alike,” he said. “As the maritime world evolved, Malta’s nautical importance came to the fore. As it ranks top of the European maritime league and sixth in the world, Malta has asserted itself as a major player not only as a flag state but in all the other aspects of the maritime industry.”

Although the Malta-based shipowning community is rather small, the increase in the number of cruise liners calling into its ports, the growth of Malta Freeport Terminal (MFT), and the surge in yacht marinas and superyacht berthing facilities all confirm that the island nation’s responsibilities are on an international level, said Mr Gauci-Maistre.

“Malta is renowned for its excellence, both in the legal and accountancy profession as well as by the port and agency service providers. The fiscal structures, which are fully approved by the European Union, and corporate and maritime laws, as well as highly respected judiciary, make Malta the preferred jurisdiction.”

The Maltese administration is very conscious of the need to be proactive, he said. As such, it is constantly seeking to stay ahead not only by being very present in the various international fora but predominantly by maintaining a very close relationship with the various stakeholders. “Needless to say, the greater the success, the greater the challenges, but traditionally we have always been capable of rising to the occasion and I firmly believe that we will continue to do so.”

Although the global shipping industry is facing challenging market conditions, the Malta Ship Registry has maintained its position as Europe’s leading flag state and sixth largest in the world, said Ivan Sammut, Registrar General of the Malta Ship Registry.  Ships totalling more than 75.2m gt were registered under the Maltese flag at the end of 2017 – this represented a 7.7% increase when compared to the 69.9m gt recorded at the end of 2016.

“Today, the Malta Registry’s fleet has become synonymous with high quality shipping. Several ship owners and managers have embraced the flag’s philosophy that investment in young, quality shipping ensures success irrespective of market conditions,” he said. “Whilst the registry continues to grow, we have also seen a gradual and constant decrease in the average age of its vessels.”

A key factor is that the Malta flag offers younger vessels reduced registration fees. “Separately, appropriate management of flag state inspections has contributed greatly to Malta’s continuing presence on the Paris MoU White List, which subsequently attracts blue chip shipping companies to the island,” said Mr Sammut.

As a rule, the registry does not accept ships more than 25 years old, while those between 20 and 25 ‘must pass an inspection by a flag state inspector prior to being provisionally registered’. 

“The Malta flag administration’s policy with regards to quality shipping, namely that ships with a poor detention or safety and marine pollution record do not operate under the Malta flag is today well endorsed by the industry,” said Mr Sammut.

Vessels flying the Maltese flag range from LNG carriers to cruise ships, from bulk carriers to ro-ro ships and from oil tankers to superyachts, he said. Last year was exceptional for  superyacht registrations – there are now more than 687 superyachts registered in Malta, an increase of nearly 20% compared to the end of 2016. This represents a record increase of over 19.5% over end 2016.

As Brexit looms and the UK, with Gibraltar, are due to leave the EU in March 2019, Mr Sammut is reporting an increased interest in Malta as a European flag, particularly from the superyacht sector.

A robust regulatory structure is vital to Malta’s achievements in the maritime sector. “A strong legislative foundation lies at the heart of our success as a nation, but its importance to the maritime industry can never be underestimated,” he said.

“By developing legislation that taps unrecognised opportunities in the market, Maritime Malta has managed to bring together many of the factors which attract the industry and which customers value. Safe ships and clean seas are matters of priority for the Malta Flag, a policy that is successfully increasing the number of quality ships on its register.

“Malta has done well in building fiscal, legal, corporate and registration services. While it is imperative that we continue to develop these, it is also time to shift our focus to other offerings which are even more ‘value added’ and strategically important.”

Matthew Attard, Partner at Ganado Advocates, said that as well as Malta remaining the largest registry in the EU, “we have seen an increase of ship management companies setting up in Malta and we expect more to come in the near future. This development in particular is helping us create a stronger physical presence of maritime professionals in the country”.

The Government has been promoting the idea of grouping together various key players from the local maritime industry to form a think tank and come up with suggestions to better the industry and coordinate accordingly, he said.

“As Vice President of the Malta Maritime Law Association (MMLA), I can also report that this year has been a very busy one for us, as we had to deal with the new laws of the tonnage tax rules following the recent European Commission decision on Malta’s adoption of the EU State Aid Guidelines (Tonnage Tax).”

Ganado’s shipping team is growing and is constantly involved in large transactions, said Mr Attard.

The MMLA is a very active maritime association and a very active member of the Comite Maritime International (CMI), says MMLA President Ann Fenech, Managing Partner at Fenech & Fenech Advocates.

“The fact that I am on the CMI executive council also helps in establishing a closer bond,” she said. “The MMLA got very heavily involved in supporting the latest CMI draft convention on the international recognition of judicial sales.”

In February, the MMLA organised an international colloquium in Malta, underthe auspices of the CMI and supported by the Maltese ministry of infrastructure and transport, to discuss the need (or not) for such a convention. The event was attended by more 170 people from at least 60 countries, from a cross-section of the industry, including owners, charterers, crew representatives, banks, BIMCO, FONASBA and ITF, said Ms Fenech.

“This enabled the drawing up of a very comprehensive report to be attached to a proposal by Switzerland to UNCITRAL requesting it to start to work on cross-border issues affecting the judicial sale of ships.”

The proposal was discussed at UNCITRAL’s 51st session in New York at the end of June and the Swiss proposal was accepted.  “This is considered as a very big coup for CMI, which continues to retain its relevance in the sector of the unification of international maritime law,” said Ms Fenech.

The MMLA President said Malta “showcases all that is maritime” and is an ideal maritime location where the maritime cluster concept has evolved and continues to evolve.

“We see the entire spectrum of the maritime activity at very close quarters.  Whether it is transhipment, ship repair, towage, salvage and pilotage services, bunkering, yachting as well as flagging and maritime legal services to take care of all this maritime activity – it all takes place here in very real terms because we are right at the coalface.

“I also believe that a very important step forward in getting all of these industries together and offering these industries a platform has been the excellent work conducted by the Malta Maritime Forum.  The forum is proving to be a very important interlocutor and bridge between the maritime services sector and Government.”

Fenech and Fenech Advocates remains “at the forefront of maritime development in Malta”, said Ms Fenech. “This past year has seen additional activity across the maritime spectrum, from acting for Tug Malta in an important salvage matter and assisting Deutsche Asset management in their purchase of shares in Tug Malta, to acting for some of the most important yachts flying the Malta flag to acting for Malta Freeport Terminals in their various areas of maritime activity.

“We are also very proud to have been entrusted by TUI and MSC in the flagging of their most recent cruise liners, like the Mein Schiff and the Seaview delivered only a few weeks ago.”

Mediterranean Maritime Hub

Companies setting up operations in the new Mediterranean Maritime Hub add value to the facility just as much as they gain value from being here, said Director Angelique Maggi.

“Basically, the concept is similar to a shopping mall where you find all the shops in one area – that is what we are creating here,” she said. “We have set up offices and dedicated workshops for entities who want to work within the hub, and these are very specialised companies that will add value.”

Being developed on the former Marsa shipbuilding site, MMH is targeting the burgeoning offshore sector by providing a logistics base with facilities, services and training, for offshore operations, mobilisation, procurement, logistics, loadout, inspections, maintenance and repair. The first phase of developments on the site is complete and the next stage of investments will include the installation of a boatlift this year; this will serve the needs of smaller offshore vessels and also the superyacht industry, said Ms Maggi.

With plenty of berthing and storage capacity, the hub will ensure efficiency can be achieved, “because waiting time can be kept at a minimum”, she said. MMH is able to host both heavy and sensitive cargo, has the space for projects such as completing pipes, and is on the doorstep of the offshore fields off Libya.

“We have had a lot of interest from anchor handling companies to come here and establish operational bases, project inspection, maintenance and preparation,” said Ms Maggi. “We are well placed for ‘first aid’ operations, to make sure vessels keep on operating.”

There are signs of increased activity thanks to the increase in oil prices, she said. “We are focusing on cautious but steady progress. The negativity and pessimism is slightly lifting and obviously we are well prepared.”

MMH expects its oil and gas academy to be in demand. “When the upturn comes, the headache of all the companies will be – where are the skilled people? The generation gap will surely impact how much operators are ready and able to deliver. We can, through our academy, make a significant difference, offering training according to the specific requirements of the company.”

Joseph Maggi, Chief Executive of the MMH Group, added: “We can offer a very rare combination of simulator and practical examples and training, all on site. Our clients can see the environment where operations actually take place. With the upgrading of fleets, the need for technical knowledge is going to increase.”

The academy provides a ‘Gateway’ foundation course for people returning to the offshore industry, to develop the new skills they need when working with more complex vessels and technology.

Palumbo Malta

The conversion towards the end of last year of Silverseas Cruises’ Silver Cloud into an ice-class expedition ship was a major triumph for Palumbo Malta Shipyard. “This was a very complicated and demanding project lasting approximately 60 days,” said Andrea Sabbion, Sales Manager in Palumbo’s commercial ships department.

The yard already has a reputation for repairing or refurbishing several cruise ships a year and, as the sector grows, more work is expected, he said.

Among recent investments, Palumbo has taken delivery of a fleet of Hammelmann hydro-jetting machines for hull blasting. These are delivering good results, being efficient but also cleaner and reducing harm to the environment.

Offshore work is another important string of Palumbo’s work in the Malta yard. While oil prices have risen, it’s too early to report any significant movements in the offshore sector, said Mr Sabbion.

“We are not seeing any substantial improvements so far. We still have some oil rigs in Malta that are laid up. There are some ideas or plans to reactive such rigs soon, but we don’t see much evidential sign of recovery in the market so far in terms of repairs or reactivation.

“We are working with a lot of oil and gas operators – for example, we just completed work on a vessel for Subsea 7. Malta is very strategic and for sure we will work a lot with offshore clients in the future but the situation still looks a little bit slow. Owners are cautious.”

However, new regulations are ensuring that the yard is receiving a lot of inquiries – daily, said Mr Sabbion – for ballast water treatment systems and scrubber retrofits. “The regulations are stringent, the deadline for these regulations is approaching and we believe that this will be a very important topic in the coming months.”

Malta Freeport Terminals

Attracting a number of new services helped Malta Freeport Terminals (MFT) to achieve a record throughput of more than 3.15m teu in 2017, a 2.2% increase on 2016. Meanwhile, investments in infrastructure and equipment have continued.

A key transhipment hub, MFT can now handle vessels of 20,000 teu and larger at both its container terminals.  It has a total 2,463 metres of operational deepwater quays, 771,000 sq m of container storage area, 15,297 container ground slots and 1,622 reefer points. All the mainline berths have a water depth of 17 metres and there are 21 quay cranes – 11 on Terminal Two, ten on Terminal One.

Both the Ocean Alliance and the 2M Alliance use MFT as a hub, and other regular callers include Hamburg Sud, Hapag-Lloyd, Seago Line and UASC, as well as
feeder services.

New services have included the IndaMed Service, linking major ports in India, Pakistan, Eastern Mediterranean and the Arabian Gulf; the Sirius Service, offering new connections to Brazil and Argentina in addition to the already established weekly services to South America that serve ports in Chile, Colombia, Ecuador and Peru; and the MESA Service, providing improved port coverage and transit times between South America’s east coast and the Mediterranean. 

Ro-ro services are provided by Grandi Navi Veloci (GNV), which is calling at MFT twice weekly.

In the past year, MFT has purchased 16 new MOL tractors and two empty handlers. The terminal has also implemented the Navis N4 terminal operating system (TOS). “This provides the Freeport with accurate and real-time information for planning, managing and tracking container movements throughout the container terminal facilities,” said a spokesperson. “The N4 system is supporting the terminal’s business performance by optimising the long-term operational efficiency and strengthening the intelligent movement of cargo through the container terminals. The system also supports future growth at the container terminals.”

Regular training and retraining of personnel has also been high on the agenda during the past months, since equipment, technology and work methods are continually evolving, said the spokesperson. Currently the employees of the operations and engineering departments are undertaking intensive in-house training.

MFT is operating at nearly full capacity in a difficult and highly competitive environment and this makes it crucial for the company to invest further in its facilities, she added. “The Freeport has embarked on yet another ambitious investment programme to boost its capabilities of handling higher traffic volumes and has concrete plans to increase its capacity to over 4m teu.”

Another 15 Kone RTGs have been ordered and are due for delivery between December this year and March 2019. Adding to the present fleet of 50 RTGs, they will be capable of stacking one-over-six high and lifting 40 tonnes under the spreader. They are expected to boost overall operational efficiency in terms of productivity and higher turnaround of vessels, said the spokesperson, and MFT is also investing in 31 new tractors and 36 new trailers.

“This investment in equipment is linked to a huge infrastructural development plan which will involve the squaring off of Terminal Two North Quay following the renewal of the development permit. Other main infrastructural works include the Terminal One yard upgrade of an area between Blocks 1 and 2 to be able to stack six-high, increasing the yard capacity by 4,000 teu, as well as the upgrade to seven-high stacking of the rail-mounted gantry crane area on Terminal One. This investment will be another valuable asset for the Freeport to enhance its competitive edge in the region.”