Shipping firms in Bahrain ‘hit by port fees'
Manama, August 6, 2014
Shipping companies in Bahrain have claimed they were being forced to downsize because of increasing port fees.
They said they were struggling to stay afloat because of the sector's continuous financial downturn combined with high taxes imposed by the Transportation Ministry's Ports and Maritime Affairs (MoT PMA) for anchoring in Bahrain's waters and a rise in tariffs related to boat registration.
UCO Marine Contracting, one of Bahrain's largest importers and the only local dredging company, has had to reduce its fleet, said its executive director Mohammed Al Mussallam.
"The General Organisation of Ports charges a fee of three fils per kilo per day on any vessel that travels out of Bahrain, once it enters the county," he said, reported the Gulf Daily News (GDN), our sister publication.
"This fee amounts to about BD9 ($23.7) a day for some ships that we are not even using - for example, we have one barge that has seen no jobs for a year and yet every day we have to pay.
"We are suffering."
He explained that other countries, such as the UAE, did not impose fees for being in local waters, adding that the levy for docking in Bahrain was almost double the amount enforced in the Emirates.
"For the time bein there is no profit this year," he said.
"A contributing factor for us is the 10 per cent drop in the price of aggregate (industrial supplies).
"The situation has caused us to reduce the number of employees as well as downsize our fleet by selling some ships.
"Before, our company had the ability to transport 180,000 tonnes of aggregate a month, now with our remaining fleet we can only transport 70,000 tonnes - but even with that reduced number the demand is less.
"We have basically had to divert our business to real estate as we are now selling ships."
He said he knew of at least three other major shipping firms that were facing similar financial problems.
His comments were reiterated by another official from an international import company, who spoke to the GDN on condition of anonymity.
"Yes, the fees are high but we can't do anything about it," he said.
"Our vessels are always on the move so we don't have problems with fees for being in Bahraini waters but the rise in fees and the economic climate are taking their toll - we may have to reconsider out business strategy."
However, the Transportation Ministry said fees related to boat registration were increased based on international standards.
"The majority of the tariffs have remained unchanged as the ministry seeks to maintain a competitive business environment for our stakeholders," it said in a statement.
"Fees for a total of three services provided by the Transportation Ministry's Ports and Maritime Affairs have changed - one has been decreased and two have been increased - namely the seafarers' competency endorsement and the deletion certificate, representing not more than two per cent of all services provided.
"MoT PMA remains committed to ensuring that the kingdom's maritime industry is developed and regulated in line with global standards, and we adopt a consultation process with relevant stakeholders throughout our policy-setting." - TradeArabia News Service