REPORTS that shipping agents have offered to take over the operation of the Limassol port from the Licensed Porters Association would be a positive development, if they did not have to pay such an extortionate price. The agents have apparently offered the Association €32 million for the monopoly it has enjoyed for years, with the state’s complicity and at the expense of the economy.
But anything would be an improvement on the current regime which has been abusing its monopolistic power for decades, imposing absurdly high charges for the services it was providing – unloading cargo from ships, transporting it to warehouses and delivering it to consignees – and driving away business. As regards imports, the charges were passed on to Cyprus’ consumers in the form of higher prices.
The licensed porters enjoyed a closed shop which they exploited to the full for their gain and at the expense of the economy, but nobody dared take them on. Their charges and restrictive practices were the main reason Larnaca port was closed down, the shipping companies that were using it as a transit cargo centre moving all their business to a much more competitively priced port with more flexible working hours, in Egypt, in the early nineties.
But instead of seeing this as a warning and dismantling the closed shop, the authorities allowed it to carry on operating at Limassol port as a business entity. It was a monopoly that imposed high prices and its only concern was that port workers enjoyed maximum pay for minimum effort. As industry sources told this paper, the port workers had no interest in increasing volume of traffic, because if it dropped they simply increased loading/unloading fees in order to maintain revenue.
This is exactly what the Licensed Porters Association did in the last few years as Limassol port cargo traffic dropped because of the global crisis. It upped loading/unloading fees, a move that maintained revenue but drove away a number of shipping lines and increased prices of imported goods. This scandalous practice combined with porters refusal to work extended shifts was never questioned by the Ports Authority, another so-called profitable semi-governmental monopoly.
But the biggest scandal of all will be that the Porters Association will receive a pay-off of €32 million to give up its monopoly, a fantastic reward for an association that caused only harm to the economy, driving away businesses and contributing to price inflation. It has been said that the shipping agents would make a better job of running Limassol port as they have a direct interest in increasing traffic volume, the implication being they would charge lower fees in order to attract new business.
But it is unlikely they would be able to lower fees enough to make Limassol port competitive again, given that they would start their operation €32 million in the red.